How to create value through Value pack segment..... A real story

I worked with a brand manager who was handling the ace brand " Chakra gold". He is a smart, witty person and has very good business sense. I used to enjoy the way he analyses the market and the way he builds the brand by apllying the right branding tools. Once in a brainstorming session we faced a deadlock. The mission was to achieve the target for the month and we were discussing on the modus operandi for the same. But we were not able to convince the brand manager for a regular promotion that we do every year to achieve our volume target. The reason was aparent. He is a person who looks at the long run(Brand Image, Equity etc....). I swear i didn't understand his perpective then and was even of the impression that He is such a jerk. He doesn't believe the sales team, that is why he is not spending on these things. But that day was an eye opener for me on how to develop a brand with a long term focus at the same time not compromising the short term objective of achieving the targets.......

We used to operate a trade scheme in the Re.1 tea pack every year. The sale used to shoot up by 50% after that. Our monthly volume normally is around 80 tons. So during scheme period it will hit 120 tons. But the outlay for the scheme is Rs. 5 per kg which is 6 lakhs for the month. The brand manager was totally against this scheme as it will only advance sale as traders will stock up and reduce the purchase in the prospective month. He suggested a different strategy to gain in the long term and also in the short run. He proposed increasing the grammage from 4gms to 4.5 gms. This means an increase in the volume automatically by 12.5 %(.5/4=12.5%). And there will be a gain of 10tons every month as its a pemanent increase. So cumulative increase in volume is 120tons and Profit is arond 30 lakhs. But at the same time there is also a increased cost due to additional grammage. Cost shoots up by 12.5 Rs/kg and therefore every month he needs to foot a bill of Rs. 10 lakhs(80000*12.5) and annually 1.2 crores. Net to net he spends 90 lakhs for an increase of 120tons(which is like 75Rs/kg). It seems huge and illogical know. But his logic for this was when you increase the grammage of the paisa pack what happens is that customer who buys it gets more cuppage and percieves a higher value. The increased CPV will help in re-buy and also may result in upselling to higher size packs where profit is more. Also new cutomers try this as it is value for money and due to word of mouth.........

What a subtlet perspective it was..... I totally enjoyed this........

Emerging BHAJJI brand

We have seen a lot of brands having a long lasting and larger than life image. They live in the minds of the consumers with a specific identity and different levels of bonding. These brands come with a specific message and a Unique selling proposition and easily gets settled in the minds of the customer. The emerging trend of what we call the " personal branding" is an interesting phenomena in the brand management arena. 

One of the examples which interested me in the recent past is the "Bhajji" brand, getting launched in various range of products. "Bhajji" is notorious for his aggressive behavior and the famous or "infamous" slap to Srishanth and the clash between him and the Aussie "Andrew Symonds". But Harbhajan is cashing on his international form and working with various designers to launch "HS" brand for range of sports products and equipments. He also has the " Bhajji da dhabha" a speciality restaurant on the anvil. Bhajji is a food freak and loves home food. So this retaurant will also have the USP of serving good quality home food offering varieties that are most liked by Bhajji. I think it is nice strategy to leverage on his popularity among the cricket aficionados and build his own brand. Hope this will be an eye opener for the other cricketers and film stars who are looking for mid career break or rather diversification to mitigate the risk of getting dumped in their field.  

"All the best Bhajji".........Great going.

Marketing Warfare.............

Frontal Attack - This is a direct head-on assault. It usually involves marshaling all your resources including a substantial financial commitment. All parts of your company must be geared up for the assault from marketing to production. It usually involves intensive advertising assaults and often entails developing a new product that is able to attack the target competitors’ line where it is strong.But they are expensive. Many valuable resources will be used and lost in the assault. Secondly, frontal attacks are often unsuccessful. If defenders are able to re-deploy their resources in time, the attacker’s strategic advantage is lost. You will be confronting strength rather than weakness. A good example for this warfare is Pepsi Vs Coke. They both are attacking each other head on and are strong in resources. 

Envelopment Strategy (also called encirclement strategy) - This is a much broader but subtle offensive strategy. It involves encircling the target competitor. This can be done in two ways. You could introduce a range of products that are similar to the target product. Each product will liberate some market share from the target competitor’s product, leaving it weakened, demoralized, and in a state of siege. If it is done stealthily, a full scale confrontation can be avoided. Alternatively, the encirclement can be based on market niches rather than products. The attacker expands the market niches that surround and encroach on the target competitor’s market. This encroachment liberates market share from the target. Tata Tea Vs HUL is a classic example. Tata tea cannot take a frontal attack on HUL due to its size and power. So it strategically developed similar products for each variant of tea and entered into market niches in and around the strong holds of

HUL. This worked well for Tata tea and helped them percolate into the market.

Leapfrog Strategy - This involves bypassing the enemy's forces altogether. It involves either developing new technologies, or creating new business models. This is a revolutionary strategy that re-writes the rule of the game. A good example may be ICICI bank. Its entry into the banking has transcended the landscape and the competitive space. Its ATMs and Internet banking attracted the elite and the creamy layer and stuck to them through the first mover advantage.

            

Stuck Between...... Dilemma of every Brand Manager

When I worked in Tata Tea Ltd, as a Sales Incharge for Chennai market, we used to have monthly review meetings with all the brand managers. I used to enjoy the debates and discussions with these managers. We present on the declining SKU(Stock Keeping Units)- Market combinations and push hard for a local promotion. Bringing conviction to my argument used to be a challenge. Because, the marketers always think that running a local promotion is such a waste;rather they're bent on using it in TV commercails are some other mass communication. We as a sales team used to fight hard and the entire meeting will be almost like a blood bath.

Here is the reconciliation of the difference in perspective of a sales person and the marketer. 

For a sale person who handles the distribution channel( distributors, and the retailers) this local promotions like trade discounts, distributor incentive, qunatity purchase schemes will give an edge to go to market and occupy the shelf with irrevocable authority. It gives him something to push the product. After all what is there in job if he doesn't enjoy any discretion to operate schemes to covert hostile customers. If it is not there, then his job is just a day-to-day sales management and grievance management. That will be totally boring. I swear. Also you need to encourage the channel constantly. Otherwise we'll pay the price for it.

But then people in the other end of the world, read as marketing managers, think spending for Local promotions is of no use as any sort of trade push just helps in "advancing sales". What's the point in spending for advancing sales. As a brand manager he is interested in the long term benefits and not the budget achievement for a month or even a quarter. So he always refuses to allocate money for LPA(Local Promotion Activities). He is rather more inclined to spending that money on TV commercials and other mass promotions which will create brand awreness and placate the hostile end consumers. This will not only increase the OTC(Over the counter) enquiry but also ends up in repeat sale if the first time buyer finds the product useful.

Here we go. I leave it to the prospective marketers to decide which approach is right........

I'm stuck between.............

Brand factor.....

Ad mania in IPL.............

 There is a lot of vacuam in the road even in the busiest streets since 16th April.......the sole reason IPL-2........But what's in there more than mere fire fighting display of cricket.......

Well, Commercials on Relaunch and new launches.......and new bunch of new ad themes........

Yes it is a feast of viewership in TVs that the marketers are trying to cash-in in the IPL-2 season. Around about 7 million viewers tuned into SET MAX, the official media partner of the event, during the inagural match between the CSK and MI. This is a straight jump from 5.6 million last year. This shows the increasing awareness for this ball game and there by the scope for reaching millions of customers for the marketers....... But there is no free lunch........The marketeres have a challenge of low TRPs inspite of increased viewership..... This is because of the on-going elections and the channel swpas because of that.......... Adding fuel to fire there is row of ads packed for huge space of time especially before the innings........It's totally nauseating and drives the customer away in all capacity...... The ads will be effective only if they are in the right time and right amount..... But there are so many brands waiting on thier wings to catch the prime spots.i.e. between overs..... After all u get 38 breaks like that excluding the two last overs...

So we are talking about a one minute or so between the overs multiplied by 38 which can air around 228 10 seconders aproximately...... Remeber each ad of this length costs arround 4.5 lakhs. SO the potential business in a single IPL match is around 20 crores including all the ads aired before and after the game too.....And the overall potential of IPL is even more humengous....There are totally 59 games in the season and therefore an ad potential of 1180 crores...............

Huge isn't it????  

The Unbranded..................

I always wonder whether branding is the essential parameter for a product to sell?.....................It's a startling question for sure...........But remember there is a huge faction living on this profession of "creating identity for a product and there by entering the complex minds of the consumers and consistently maintaining the share of mind by battling the selective attention, and share of voice by battling the selective retention".That's not a easy task in the present scenario as customers are beleagured by 1000s of brands at a time and hence all brands do not enter the minds of the customers. Even if it enters its life is "ephemeral". Considering all this, i' m coming back to the self-imposed question that i raised at the beginning. Let's take the example of a classic product that we all consume....Nimbu Pani......Before Nimbooz was slated to launch there were hardly any global brands or rather national brands. People decide the place of purchase just by taste then. But now after the branding people tend to go behind it due to "subliminal perception" created by perverted and meaningless ads.... So this proves a point to the layman like you and me.... If you are a marketer and are planning a living out of it, do learn it with undue attention........You can tip the scale in your direction even when the unbranded product is so good in quality and so frugal to the wallet of the consumer......All you require is to squeeze your brain to claim the non-existant qualities of the product that you are marketing and activate the part of the brain of the consumer that says "All i need is unncessary merchandise that is branded"..... That will decimate the unbranded to a collection of trifling rubris.................I assure you..............