What comes to your mind when you first think of Bata? The store which has an innovative way of pricing products by rounding them off to the next rupee (creating a psychological appeal on the customer)? Or the fact that it is a value-for-money footwear retail chain that caters to several different market segments? Nobody would relate back to the history of Bata, which was originally started by a Czechoslovakian entrepreneur, Tomas Bata in 1894 and now has branches all over the world! Such is the power of linking a global company to a local market by understanding the pulse of the local people. Although Bata started off as the pioneer in footwear, as Indians started aping the West, the simple, affordable Bata strategy took a backseat. Through the 90’s Bata went through a trying period, steeped in union problems with employee strikes and a downward spiral when it came to sales, and although various revamping strategies including introducing multiple foreign footwear brands were attempted, it failed to recapture its glory days. Enter Marcelo Villagran and suddenly the story changes. This Chilean who has been with Bata & Co for nearly four decades made the profits jump by 58% at the end of 2008. Efforts like cost cutting, revising products and focusing on the young and trendy Indian are the root cause for its leap of success. All in all, a creative Marketing strategy holds the key to such successful ventures, and it almost has an indigenous sole!
Act, think and work locally
Be it a breakfast cereal, washing machine or passenger car, understand the Indian consumer before selling it to him. An average Indian buyer researches each product before buying, and the reputation of a product is very important to him. Two examples of companies that played their marketing cards well are South Korean companies, Hyundai and LG Electronics. LG entered the Indian market in 1997 with a strategy of catering to the local market, by targeting India’s 40 million middle-class households. It setup research and development (R&D) and manufacturing facilities in India to tailor products to suit Indian needs. It was not just products. LG also realized the need to think locally. Kwang-Ro Kim, the first Managing Director at LG India, says, “Indians were the decision-makers across all our functional units, and our Korean product managers acted as advisers or consultants to share their experiences from other countries,” says Kwang. The sales process was localised and administrative offices were setup across all major Indian cities. They partnered with the Indian cricket team to enhance their brand image. Their sales managers not only understood revenue, they worked closely with manufacturing to cut costs and transfer the ‘voice of the consumer’ to product managers. By 2005, LG was the market leader in several categories. They held a 25 per cent market share (by sales numbers) in colour TVs, 35 per cent in washing machines and a 38 per cent in microwave ovens.
Possibly the often quoted 4 P’s of Marketing (Product, Price, Place and Promotion) might have to make a provision in India’s case for a fifth P, the Pulse of the People.
Hyundai’s case is very similar. They launched the ‘Santro’ at a time when several people were looking to upgrade from the two-wheeler segment. They set up a high-capacity factory in Chennai, along with a dedicated network of Indian and Korean vendors and suppliers. Their tallboy design made their car look different from the Maruti 800. And, they were bang on with their pricing strategy as well.
Celebrities enhance the quality of the ad
Today, celebrity endorsements play a significant role in ‘branding’ in our country Be it Katrina Kaif adding the oomph factor to the Slice advertisement, or AR Rahman adding class to the Airtel ad, there is no doubt that ‘brand recall’ and the ability of a product to connect with its core target market is enhanced by these celebrities. A fair amount of research goes into identifying these brand ambassadors. “Brands are making the best use of the celebrities they rope in. Contrary to popular belief, their image plays a very important role as well,” says Ramanujam Sridhar, CEO of brand-comm, a brand consulting company. Certain brands localize their branding by roping in stars relevant to the respective region, while some others like Airtel tend to go for a pan-India strategy. In late 2008, Airtel roped in Vidya Balan and Madhavan to feature them in a series of commercials, as a laid back, couple-next-door from Mumbai or Chennai. Their on-screen chemistry in Mani Rathnam’s Guru was the main trigger while promoting several Airtel services including mobile commerce and lower roaming rates. Airtel –A.R. Rahman collaboration led to a popular jingle and the tune’s popularity made Airtel use the magic maker himself in the ad. It’s a true blue example of leveraging the ad to the maximum, and making the Airtel ring tone a household tune.
The Internet is abuzz with social networking sites and public portals. Increasingly, people are spending a lot of time online, on several social networking sites including orkut, facebook and twitter. In spite of the fact that the total number of Internet users is minuscule compared to the overall urban population (43.5 million in September 2008 urban Internet users while the urban literate population amounts to 200 million), several marketers believe that social media is a cost-effective and efficient means of word-of-mouth marketing. Marketers are especially using these online platforms for better customer support and improve the overall quality of after-sales service.
Recently, cleartrip.com, an online travel portal, assayed an issue of customer dissatisfaction. Cleartrip altered the ticket details of a customer without informing him. He was held up at the airport as his original ticket became void. The customer had to purchase a ticket immediately at the airport thus doubling his expenses. The customer wrote a blog post about his experience and also posted a link to his blog post on Twitter. Cleartrip’s customer service representative, who stumbled upon this post, sorted out the customer’s issues. Eventually, cleartrip.com had a blog post on how they handled this situation. Using social media, companies can interact directly with their current and prospective customers.
Tapping the rural market
Thanks to the penetration of mobile phones and televisions, rural consumers are fairly well informed about the latest consumer products available. Recognising the strong market that rural India offers, big companies like Hindustan Unilever (HUL) and Dabur India are taking this segment seriously. Last year, HUL launched Project Shakti, a direct-to-home advertising campaign in rural areas. HUL representatives educated and marketed some of their products to rural customers and even appointed local women as their spokesperson. In tandem with these campaigns, low-cost consumer products including toothpastes, soaps, and biscuits were available for sale in small stores in these villages. Pricing was the key, and product managers understood this early and created sachets and smaller sized toothpaste tubes, specifically targeted at rural India. Pepsodent toothpaste was available for Rs. 4, and a 50 gm. Godrej Soap was available for Rs 2.
While catering to the rural market, it is also important to understand the need of the hour. Nokia in India launched Life Tools in 2008 to a restricted audience. This includes a range of services including agriculture, education and entertainment. The agriculture segment focuses on educating the farmer about crop circles, climate, seeds, fertilizers and the market prices. Education aims to provide career and educational services including easy English learning, examination preparation and career tips. Entertainment includes news, horoscope, music and ringtones, among other things. The service also has the capability to display two different languages in one page, a graphically vibrant application and is independent of a GPRS facility.
Customize and Re-mix
India’s market for consumer goods alone is pitted to reach figures of $400 million by 2010, according to a McKinsey Quarterly report. Nokia, which holds 60% of the market share in India, recently flew down one of its senior designers to observe the Indian consumer for specific design ideas on new models. Their strategy is to draw inspiration from various users and cater to a wide array of users and not focus on just a single design or segment of the market. The recipe for a good marketing strategy is to remain uniquely Indian irrespective of the market segment, be it rural or urban, an FMCG company or a local toothpaste brand. There is an inherent need to track the evolving Indian consumer’s changing preferences as an increasing number flock towards international brands while consistently expecting a value for money quality product. Possibly the often quoted 4 P’s of Marketing might have to make a provision in India’s case for a fifth P, the Pulse of the People.