Financial Daily from THE HINDU group of publications
Thursday, Mar 28, 2002
Get your marketing mix just right
DELL Computer Company is known for its online ordering proposition; HP is not known for it though it is equally a well-known brand. Frooti may have a higher recall than a number of other carton drink brands. The 29-inch TV segment in India may be only five per cent of the total market but may be experiencing a significant growth. LG, a consumer durables brand, is known for its innovative features.
Successful brands establish critical linkages across marketing mix elements. This is critical in a competitive environment, especially when product differentiation may not provide a long-term advantage. A brand known for its innovative features will soon have competition from `follower' brands and hence may have to create brand associations which revolve around the strength of the brand as this would place the brand `on top of' consumers' minds and create a preference even when other brands follow the pioneering brand with regard to the core offering.
Importance of marketing mix
Elements of the marketing mix form the foundation for any marketing strategy. It establishes the brand's strategy in a systematic and structured manner. It helps the marketer to establish linkages with the focused target segment. Decades ago, companies may have attempted third degree marketing - which is `placing' the brand in the market and later fine-tuning the marketing mix elements (if the situation demanded) to suit the needs of the target segment. In the Indian context, during the pre-liberalised era there was practically no competition and a few brands dominated the market in several product categories. This, in fact, encouraged marketers to practice third degree marketing (even without the need to either clearly define the market or to fine-tune marketing mix elements).
In today's context, even the brands which have been in the market for several decades make a planned attempt to construct a strategy based on marketing mix, carefully identifying the scope for providing a competitive marketing mix. Amrutanjan has used a number of marketing mix elements to become competitive in recent times with several product variants for different segments of the market. Iodex is one more brand which has contemporarised its marketing mix elements. Though Maruti has been around in the Indian market only from the early eighties, it has been forced to attempt a number of strategies to maintain its leadership - launching new models, sub-brands, providing several services which today includes trading used cars and expanding its distribution. Bajaj, almost a generic name in the category of scooters, has introduced several variants, built up brands in the motorcycle category and even launched models with a lifestyle proposition (Classic, Bravo). The importance of marketing mix elements not only emphasises the combination of marketing mix elements; they also stress the timing of such combinations. Kores was a well-known brand in the category of copiers; Rajdoot had considerable brand equity even during the eighties; HMT watches were associated with Indian-made watches at a time when the trend of digital watches had not yet set in. Zodiac was probably the earliest readymade-wear brand in the category of men's readymade wear.
In a number of these cases, it is clear that the timing of the marketing mix elements would have played a greater role in sustaining the equity of the brand which was created because of the pioneering lead. It would be interesting to note that timing should not mean being ahead of consumers' needs. Gestetner introduced digital copiers in a market where digital copiers form an insignificant share. While Eveready may offer alkaline (longer life) batteries, the marketing mix has to carefully take into consideration that over 90 per cent of the Indian market still buys the conventional batteries. A number of tyre brands may offer radials but the market is yet to use them in a significant manner. Merlin brand came out with home theatre systems in the mid-eighties when consumers were just getting used to two-in-ones (mass market) and televisions. Even today home-theatres have a limited market.
While a brand could develop a product offering to cater to a niche market (Dove moisturiser bar or even the plasma television sets which cost a couple of lakhs of rupees), it has to have a conscious marketing mix plan taking into consideration the realities of the market.
Need to prioritise the marketing mix elements
In a competitive situation, a firm has to prioritise marketing mix elements. This does not mean concentrating only on a few elements and ignoring the others. Prioritising emphasises the need to recognise the fact that some elements may be important than others at a given point in time. When Samsung entered the Indian context, it had sophisticated offerings but the priorities were to develop a brand with such associations and to develop a distribution channel. Whirlpool, the fastest growing refrigerator brand in India, emphasised product offerings adapted to local consumers through marketing research. This enabled the brand to come out with offerings which were in tune with the needs of consumers.
Heinz, the globally known ketchup brand, entered India where Kissan and Maggi are well established and with which consumers were familiar. Though the brand may have had a superior offering in terms of product attributes, there was a need to create brand awareness and then link the brand's attributes to the name of the brand. Advertising through a well-planned positioning strategy was required to bring the brand within the `consideration set' of consumers. It should be noted that the penetration of the category (ketchup) is low, in the order of 2-3 per cent. The Heinz advertising campaign mentioned that the brand was synonymous with the category of ketchup in a market where consumers were unfamiliar with the brand. Besides, the brand followed an upmarket skimming pricing strategy of pricing the offering higher than the competitive offerings.
While advertising may have been prioritised by the brand as a prerequisite for its `start-up' strategy, the brand had probably assumed that consumers in India are familiar with the brand and would associate it with the category (which could be true of other markets in the world). Further, pricing the product high in a country where there is a need to sell the concept and create a market need not have been a priority. A lower priced variant introduced with an innovative recipe drawn from traditional foods could have made a better impact on consumers. The brand later introduced a sales promotion which was followed by the strongly entrenched brands in the category. The priority of the brand should have been a low-priced variant positioned to create a trial for the brand and expand the market.
Kellogg's, another global brand in the category of foods, created trials for its cornflakes initially when it entered the Indian context but was unable to sustain repeat purchase because of its high prices (almost 100 per cent over the existing competitive brands).
Prioritisation of marketing mix elements starts from the clarity associated with the definition of target segment. If a brand of cereal aspires to be a niche brand it should have a marketing mix very different from that for middle-class consumers (to make them substitute their regular breakfast with cereals, which is not easy as eating is a part of the culture in any part of the world). A niche brand could prioritise premium pricing and a high visibility advertising campaign emphasising its global associations. A mass market brand (however global it is) has to prioritise low unit price in a country like India. Perhaps there could be some logic for a global brand to even be the loss leader (with a low price) in India until the time a strong loyalty is established. Having an approach like this would enable the brand to increase the share of the customer besides expanding the market. This could be a workable strategy, especially for a brand entering the food category as experience all over the world shows that such brands take decades to become a part of the `consumer's habit'.
Marketing mix priorities and synchronisation
Titan, which holds a significant share of the organised quartz market, has been able to plan the marketing mix priority and also synchronise the linkages between different marketing mix elements. The brand may currently be working towards stabilising its profitability (due to some reasons) but the approach of the company towards marketing mix elements has been methodical. The unorganised sector in the quartz watch market is larger than the organised sector and the brand's progress has been due to the carefully orchestrated marketing mix - as stated earlier, prioritisation of marketing mix elements should lead to synchronisation as demanded by the situation.
The basic decision of Titan during the mid-Eighties was to be only in the quartz watch market (product decision). The initial campaigns of the brand created awareness by mentioning that Titan is as good as foreign makes. Then the brand developed the emotional appeal by projecting the popular Titan jingle (it is today the `property' of the brand and almost every advertisement of the brand carries the music). Simultaneously the brand transformed the `watch buying' experience from bazaar shops to exclusive outlets which offered ambience and comfort. Several variants were created at different price points for various segments and perhaps the initial problems in differentiation between various models was overcome by the effective application of sub-brands (Bandhan, Nebula, Dash, Fast Track and so on). The brand has also developed an effective retail network with its presence in multi-brand outlets. All the efforts later with regard to the marketing mix elements have resulted in the brand being well within the `top of mind' recall of most Indian consumers contemplating the purchase of a watch.
The approach of Titan could be compared with that of Citizen (the well-known Japanese brand) in the Indian market. Citizen had excellent brand equity - it was known for its quality. The brand could have effectively made use of marketing mix elements in the Indian context, given the reality that a major chunk of watches purchased in the country are priced at below Rs 1,000.
Sony in television, Reebok in the category of footwear, Ray-Ban in the category of sunglasses and Mercedes in cars and some brands which entered the Indian context with a tremendous degree of equity and a well-planned marketing mix could enable them to adapt effectively to the Indian context.
Unorganised markets and marketing mix elements (FMCG)
India is probably one of the very few markets in which brands need to compete with the unorganised sector (biscuits, pens, detergents, footwear, dishwashing powders, traditional snacks, tea, edible oil and commodities to name a few categories). The most important aspect of the marketing mix in most of these categories is the value - the quality of the product and the price at which the quality is offered to consumers at the lower end. An equally important element is promotion - a high-visibility campaign which creates awareness about the brand offering the value. A-1 tea, Vendee edible oil (loose branded oil offered through vending machines), Vim, Lakhani footwear), Tiger biscuits, Haldiram's and MTR snacks and Nirma detergent are some examples which have demonstrated the usefulness of the approach.
Tiger from Britannia is a very good example of a brand providing value at the lower end of the market. Biscuits almost form a part of the food consumption culture and Tiger provided an offering which effectively competed with other offerings from the unorganised sector at an affordable price. The brand also created memorable campaigns.
Marketing mix elements are equally important in international marketing. They even influence the manner in which a brand's associations are formed in the psyche of the consumer. Mont Blanc's products (known more for its classy pens) are premium products the world over but Citibank has different associations in different international markets (a mass market bank in the US and a premium bank offering banking services in several markets in Asia).
Marketing mix elements have to be dynamic in a digital environment but within the boundaries of an organisation's capabilities.
(The author is Professor of Marketing, Indian Institute of Management, Bangalore.)
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