An Indian heart needed to succeed in India
- Harish B
Having an 'Indian heart' is all about understanding the psyche of Indian consumers.
This translates into consumer-centric innovations like the poly-coating on Vim dish wash bars, waterproof Band-Aid, shampoo sachets or a mobile phone with a torch (Nokia 1100).
To succeed in India, one needs to use the four pillars: functionality, value for money, goodness and communication.
Function maketh the brand
Functionality is a significant determinant of successful brand building in India. The success of Toyota Qualis is a classic example that shows the overriding importance of functional performance in buying decisions.
Toyota was criticised for bringing in a dated product to India. But market watchers were surprised at the overwhelming reception that Qualis received because of its functional performance.
Because of its perceived lack of functional performance compared to traditional breakfast food, Kellogg's has been finding it difficult to enter the Indian breakfast table.
However, Maggi was able to create a huge market for noodles by communicating the functional value of the product and by adapting itself to Indian consumer culture.
Cease Fire, a home fire extinguisher from Real Value Appliances, was a success despite being an unsought product, as consumers saw a functional value in it. The same company failed with its Vacumizer brand because customers did not see any functionality.
The lesson is that mere emotional or aspirational value will not work in the Indian market. Successful and everlasting brands have proven their mettle in their utility.
To quote marketing guru Philip Kotler: "A brand is built by performance, not advertising. Advertising can only make you aware and possibly interested but it's the trial and fulfillment of created expectations that count most."
VFM rules
There is a joke about an Indian consumer who was thrown out of the showroom when he asked about the mileage of a super luxury car. The Indian consumer's obsession with value is famous.
This tenacity has created a new market for mass prestige (masstige) products in India. But most brands fail to understand the link between functional performance and the value proposition.
The lukewarm response to several iconic international brands when they launched in India is a result of this. The iPod or an Apple computer could not replicate their global success in India because of this mismatch. Although iPod still ranks supreme in aspirational value, it is not translating into sales.
The value proposition delivery has forced many brands to reorient their strategy in India. Levi's launched a much affordable Signature range to cater to value conscious buyers.
Shampoos sachets were successful as customers saw more value in sachets than in bottles. The boom in mobile telephony is because of low tariffs as well as the low handset rates. The ubiquitous Maruti-800 is still in demand because of its unbeatable value proposition.
But often low price is confused with value. When personal computer marketers launched the sub-Rs 10,000 computer, analysts were bullish. But the functional performance of the low-priced variants put off potential consumers.
The big C
"To persuade someone to do something, or buy something, it seems to me that you should use their language, the language in which they think," said advertising legend David Ogilvy.
Interestingly, brands that have been successful in India were able to connect with consumers in a language they relate to. A classic example is the case of beverage brand Horlicks. Globally Horlicks is positioned as a drink targeting adults, but in India it's a health drink for kids. McDonald's was able to Indianise itself through a series of campaigns which are truly Indian.
Indian consumers like products to have a global outlook with Indian heart. Initially, suitings brand Reid & Taylor built its brand image using the character of "James Bond" and then Indianised the brand with Amitabh Bachchan.
Surf is a brand that has perfected the communication pathway to reach Indian minds. From the basic functional communication through Lalithaji to the current "Dirt is Good "campaign, Surf has been truly Indian. Pepsi took the Indian market by storm with its blockbuster ad campaigns made for India.
Brands like Santoor and Ujala are clear examples of a successful Indian way of communication. Both brands have maintained their respective market positions for more than a decade.
The goodness quotient
More than the present, goodness is an attribute for the future. It's not that the brand should take up social responsibility activities, but it should be able to convey its goodness to the consumer.
Brands like Lifebuoy (Lifebuoy swasthya chetana), Colgate (zero tooth decay) and Fair & Lovely (women empowerment) have initiated programmes to communicate that these brands have a heart.
Even without such initiatives, brands can convey goodness through product improvements.
For example, the Atta noodles and Rice noodle variants of Maggi are excellent examples of brands bringing in goodness. Goodness helps brands to bridge the perception of 'exploitation', build brand equity and helps in connecting with customers better.
These are just signposts in the difficult process of surviving this marketplace. In this process some rules will be broken, for there is no formula for success.
Harish B is an assistant professor at the School of Communication and Management Studies, Kochi, and authors the blog, Marketing Practice.
Friday, January 11, 2008
Decoding the Rs 1 lakh message
Decoding the Rs 1 lakh message
-Ajit Balakrishnan (rediff.com)
It is early January here in New York and the weather had no right to be as warm and sunny as it is today. By any account it has to be freezing and below zero Celsius and the streets have to be speckled with dirty, melting snow puddles. These pigeons that we see hopping along in the square ought to be hiding from the cold in a warm nook of some building. The streets are bustling with people. This is not a sight for early January. People ought to be indoors and the streets ought to wear the deserted January look.
I find myself strolling back from lunch with a prominent technology guru of a prominent Wall Street bank.
"I have finally figured out what 'one lakh' means," he said to me.
"How come?" I asked, genuinely surprised. There have many things I have tried explaining about India to our western friends, but not our numerical system of "lakhs" and "crores". I thought we had left that safely behind in favour of "hundreds of thousands" and "millions". The term "lakh" had seemed so archaic. But here it was, back in the world's headlines with the "Rupees One Lakh car" from the Tatas.
"I believe what the Tatas are unveiling today, their Rs 1-lakh car, is going to change the way the world looks at Indian companies," my tech guru friend said.
"When the Indian software industry made its mark," he continued, "the rest of the world had understood how they did it; Indian programmers were a tenth as expensive as programmers in the West. Then the Indian rupee steeply devalued from Rs 8 per dollar in the mid-1980s to Rs 45+ per dollar in the mid- 1990s, making the cost competitiveness case even more compelling. But the Rs 1-lakh car is different.
"They will get to this target not by using cheaper labour or cheaper materials available only in India. They are going to get to this by bringing into play product design skills, consumer insights, management systems, perhaps even a new business design. In other words, they are going to compete on capabilities, not resources. That's why it is sending a shudder down the spine of many Western executives, not just car industry executives."
Tata Nano: The world's cheapest car
As I walked back to my office my mind strayed to other such moments in industrial history.
Take, for instance, Richard Arkwright's successful effort in the early part of the 19th century to make machines spin yarn of a quality equal to or better than that spun by skilled, hand spinners in India. His innovation made yarn cheaper and thus made cotton cloth woven from it affordable not merely by the very wealthy and it had been till then.
What Arkwright did was not saving labour costs by using machines instead of labour because any such savings were more than offset by the cost of equipment and factory buildings... His real innovation was in the design of work such that workers would all congregate at a fixed place of work (a "factory") and thus work for predictable hours and under tight supervision as opposed to working odd hours at home. Superior work organisation allowed output to be dramatically increased and made cotton yarn widely available, a feat that home-based spinners could not achieve.
The rise of the Western world was predicated first on this idea -- the use of machines to do at one central place what hitherto human muscle power had done in decentralised home-based activity. Then came the use of chemistry to make synthetically and in plenty materials that had been hitherto available in nature in restricted quantities and in varying quality levels and consequentially at higher prices.
Thus indigo from India was synthetically produced and became available in vast quantities and at a fraction of the price of natural indigo; aspirin, hitherto distilled from the bark of willow, was similarly synthesised and millions of ordinary citizens benefited.
Henry Ford created another revolution when he launched his Model T car and brought cars within the reach of ordinary people. He did this by deploying "mass production" techniques -- a new system of arranging a sequence of metal working machine, which did repetitive operations reliably and which could be supervised by the illiterate, unskilled immigrant labour coming off the impoverished farms of Ireland and Southern Italy -- the only kind of labour available to him at that time. Ford's "big idea', mass production, then got deployed in a wide variety of metal working industries and made such objects like the sewing machine and bicycles affordable by all.
The "big idea" behind the Rs 1 lakh Tata car is this -- an Indian company has dreamt up a management system and a business design to build cars that are affordable by people who had never dared dream of owning a car.
The real message of the Rs 1 lakh car is that in one stroke, it is showing the way to Indian managements that a new era awaits -- one where you compete on superior management capability leaving behind decades of attempting to compete on cheaper labour or cheaper natural resources.
It's like the early coming of spring after a long cold winter.
Ajit Balakrishnan is the founder and chief executive officer, rediff.com.
-Ajit Balakrishnan (rediff.com)
It is early January here in New York and the weather had no right to be as warm and sunny as it is today. By any account it has to be freezing and below zero Celsius and the streets have to be speckled with dirty, melting snow puddles. These pigeons that we see hopping along in the square ought to be hiding from the cold in a warm nook of some building. The streets are bustling with people. This is not a sight for early January. People ought to be indoors and the streets ought to wear the deserted January look.
I find myself strolling back from lunch with a prominent technology guru of a prominent Wall Street bank.
"I have finally figured out what 'one lakh' means," he said to me.
"How come?" I asked, genuinely surprised. There have many things I have tried explaining about India to our western friends, but not our numerical system of "lakhs" and "crores". I thought we had left that safely behind in favour of "hundreds of thousands" and "millions". The term "lakh" had seemed so archaic. But here it was, back in the world's headlines with the "Rupees One Lakh car" from the Tatas.
"I believe what the Tatas are unveiling today, their Rs 1-lakh car, is going to change the way the world looks at Indian companies," my tech guru friend said.
"When the Indian software industry made its mark," he continued, "the rest of the world had understood how they did it; Indian programmers were a tenth as expensive as programmers in the West. Then the Indian rupee steeply devalued from Rs 8 per dollar in the mid-1980s to Rs 45+ per dollar in the mid- 1990s, making the cost competitiveness case even more compelling. But the Rs 1-lakh car is different.
"They will get to this target not by using cheaper labour or cheaper materials available only in India. They are going to get to this by bringing into play product design skills, consumer insights, management systems, perhaps even a new business design. In other words, they are going to compete on capabilities, not resources. That's why it is sending a shudder down the spine of many Western executives, not just car industry executives."
Tata Nano: The world's cheapest car
As I walked back to my office my mind strayed to other such moments in industrial history.
Take, for instance, Richard Arkwright's successful effort in the early part of the 19th century to make machines spin yarn of a quality equal to or better than that spun by skilled, hand spinners in India. His innovation made yarn cheaper and thus made cotton cloth woven from it affordable not merely by the very wealthy and it had been till then.
What Arkwright did was not saving labour costs by using machines instead of labour because any such savings were more than offset by the cost of equipment and factory buildings... His real innovation was in the design of work such that workers would all congregate at a fixed place of work (a "factory") and thus work for predictable hours and under tight supervision as opposed to working odd hours at home. Superior work organisation allowed output to be dramatically increased and made cotton yarn widely available, a feat that home-based spinners could not achieve.
The rise of the Western world was predicated first on this idea -- the use of machines to do at one central place what hitherto human muscle power had done in decentralised home-based activity. Then came the use of chemistry to make synthetically and in plenty materials that had been hitherto available in nature in restricted quantities and in varying quality levels and consequentially at higher prices.
Thus indigo from India was synthetically produced and became available in vast quantities and at a fraction of the price of natural indigo; aspirin, hitherto distilled from the bark of willow, was similarly synthesised and millions of ordinary citizens benefited.
Henry Ford created another revolution when he launched his Model T car and brought cars within the reach of ordinary people. He did this by deploying "mass production" techniques -- a new system of arranging a sequence of metal working machine, which did repetitive operations reliably and which could be supervised by the illiterate, unskilled immigrant labour coming off the impoverished farms of Ireland and Southern Italy -- the only kind of labour available to him at that time. Ford's "big idea', mass production, then got deployed in a wide variety of metal working industries and made such objects like the sewing machine and bicycles affordable by all.
The "big idea" behind the Rs 1 lakh Tata car is this -- an Indian company has dreamt up a management system and a business design to build cars that are affordable by people who had never dared dream of owning a car.
The real message of the Rs 1 lakh car is that in one stroke, it is showing the way to Indian managements that a new era awaits -- one where you compete on superior management capability leaving behind decades of attempting to compete on cheaper labour or cheaper natural resources.
It's like the early coming of spring after a long cold winter.
Ajit Balakrishnan is the founder and chief executive officer, rediff.com.
Subscribe to:
Comments (Atom)