The Hindu Business Line : It happened this Brand Year

AS we open a new year ahead, let's look at trends that made the marketing year 2004 what it was. Trends that point at clear directions for the future as well.

Retro was here

If there was a trend that was indeed short-lived this year, it was that which experimented with retro-marketing. Consumers woke up to the tunes of Kya aap Close up kartein hain? which used the nasal twang of old Hindi cinema music to wake up a category that finds itself in the flux of pari passu advertising. The toothpaste category, one of the oldest marketed categories in the country, finds it difficult to stay different from the rest. This is a category that has been there and done that. It has experimented with every format. Positioning strategies have been done to death with brands having gone through the vast and laborious menu of options available more than once.

Vanilla Coke attempted an Elvis-esque version of the Indi-pop retro effort, bell-bottoms, large sideburns, flashy gold et al. And wonder what happened to the products then? The Ambassador retro and the Zen retro, to boot! And more to come! This is a trend to look out for.

Marketers who have traversed too far on the trajectory of the contemporary and the futuristic will want to look back at the years gone by. The marketer will want to invent products that look retro and the advertiser will want to experiment with themes that takes one back to the past. Old is bold!

Back to 1:1

The Indian marketer is today a third-generation marketer. Though not a mature market as yet in terms of consumer awareness and activism, we are on our way there! The best way to sell, and indeed the best way to market, has been the 1:1 format of selling. In the good old days, this is the way our granddad marketer did it. The best way to sell anything to anyone is to be right in front of them, in their offices, in their homes, in their face!

When this form of 1:1 selling got difficult, the marketer did the next best thing. She went ahead and spoke to groups of people together. One salesperson selling to many. This is certainly a less efficient way of selling. The selling interview is 1:Many and the ability of the salesperson to focus on each and every one of the potential customers in the group is limited. And when that got tough to achieve as well, the marketer invented the 1:Very Many format.

The evolution of mass media provided for this possibility. One television advertisement acted as the inanimate salesperson at work, taking the brand's message to millions of potential customers. This was and is blind selling at its best! This form of mass media advertising worked most efficiently when it was nascent and when the clutter of similar messaging was low. Today, the marketer is waking up and wondering why his advertising is not working. Mass media advertising seems to work well to create awareness, but seems to get weaker and weaker as it performs its other key roles of creating an interest in the product or service, a desire to purchase, the actual purchase, and most certainly the process of post-purchase dissonance management as well! As this hits the marketer straight out where it hurts the most, he is busy looking for solutions.

The year 2004 saw successes in solutions that seem to have taken off. It is back to the Vedas of good old selling and marketing. 1:1 is back. With a vengeance. One of the biggest marketing success stories is surely the Amway juggernaut, which has notched up impressive numbers in terms of spread of operations and sales as well! HLL has been quick to jump onto the bandwagon as have many other savvy companies.

1:1 is back in selling, advertising and branding as well! Look keenly at this development. It is tough to implement, tough to set up, and a whole new mindset to adopt! Once set rolling, it won't stop!

Every product is a service

My contention for the last six years remains true. Think of it. Every product, at the end of the day, is a service.It has to convert its appeal into that of a relevant service to the consumer. A tube of toothpaste is a product on the shelf, but in your loo, it turns into a service of immense utility. So is a cake of soap or the packet of tea that screams out "Pick me up!" from the shelves.

The brand marketer has started experimenting this year with an active conversion of his product appeal into a service appeal of significance. Lakme is not a beauty aid pack sold off the shelf alone. Instead, it is a chain of beauty parlours. IFB Bosch is not a washing machine alone. It can be a chain of IFB Bosch Laundromats. Watch out for more to come in every category. If coffee is the product, as it has been for so many years, the café is the service! And if God is the product, the church and temple are its avatars of a service!

And what about services to products? Is the reverse trend possible then? Yes, why not? The company that is in services today will want to morph its services into products for the future. A Barista will, therefore, launch its own brand of packet coffee, just as an Oberoi group of hotels may launch its range of branded curry pastes. Go further, and Airtel just might be a range of belts and bags and rucksacks, just as a Jet of the Airways fame can be a chain of massage parlours.

The Koreans are here

This surely is a trend. A trend that made its appearance in 2004, for sure. Look around you! Hyundai was a car. Today, it is a television set in your drawing room and possibly a microwave oven in your kitchen. LG was a television set; today, it is a toothpaste and shampoo in your loo! These brand images are jarring your senses. How can a Hyundai be a microwave and an LG a toothpaste? What happened to core competence? And what happened to focused imagery?

If the brand is a thought, it is a focused thought as well. A brand can't be just about everything. Or can it? The Korean companies are challenging all this. The Japanese will follow, and brand-thinkers will churn in their graves (existing and proposed)! Watch out for more to come. And watch out for lots of these brands biting the dust in the conservative marketplace for brand names in India. Will your morning cuppa be a Honda tea? And will Nokia be the toilet paper it used to be? Brand life is complex!

Make the consumer pay

The consumer pays your salary and mine. Make him pay for more. That seems the new marketing mantra that marries technology with media. Look keenly at the trend propagated by some media houses on television. The formula is simple. Take a television channel. Take a news programme. At the end of the programme, ask a question. Get your audience to revert with an SMS. The game goes on. Three SMS messages will be exchanged. The television channel gets the consumer to interact with its channel that much better. It gets the viewer to understand the offering on hand well enough, with a tool that is close enough to 1:1 communication as any. And what's more, the consumer pays for the SMS. The consumer pays to get to know your channel better! Wow! And there's more.

On every SMS message the channel receives, there is a revenue sharing arrangement with the service provider. The consumer pays for the SMS exchanges and the television channel makes money on what he spends on his SMS as well! Wow! How far will this go? Interactivity will be the name of the game that media will play with its viewers. The more interactivity you build, the better the loyalty scores. The more you have consumers exchanging text messages with you, the greater will be your utility. This will therefore morph into the mobile device in your palm becoming a device of immense utility. Anything you want, you will ask of your mobile!

Where is the premium?

Brands were at war this year with one another. What's new? Plenty. Brands cut their noses to spite their pretty faces, really. Very dramatic price cuts hit the Indian market by surprise, much to the delight of the consumer. This price war, which started off in the detergents category and cascaded onto very many other categories in the FMCG space, has changed brand perceptions in the marketplace. The consumer is happy. At the same time, he is a really worried man. He wonders loud as to how all these years he was ostensibly taken for a ride by the marketer at large. If these big guys in the world of marketing can cut prices by half now, it simply means they could have done it long back. They didn't. The consumer is questioning the value of a brand itself. Is a non-brand good enough then?

From the brand side, there is a worry as well. The classical distinction of a brand is the fact that a brand is a premium. Brands bring in premiums to companies that tout them. The brand is different from commodity on this one score for sure. A premium that insulates the marketer and his future. With price cuts such as the ones seen in the year 2004, marketers are wondering where the premiums are. Premiums have vanished, or are simply wafer-thin. When a brand does not bring in premiums, and indeed the obscene margins one is so used to as in the past, the very validity of the brand and its economic utility is in question. This is happening in the oldest marketed categories. Detergents. Teas. Soaps. Toothpaste. More. Top-line volumes in these categories are down. Growth is not to be seen. And bottom line margins have vanished. The marketing meltdown is here! Year 2004 brought it in! How long, before a recovery? This is a mug's game! Just wait and watch!

Rush to the small town

There is a rush of interest once again in the rural and small-town markets. Time to focus not only on the seven big cities of the marketscape, but on the 43 one-million plus population towns as well. Prosperity reigns here as well. Look at India as a sum of small towns, then. Life Insurance Corporation of India sold 55 per cent of its policies in small town India. Of the 20 million Rediffmail signups, 60 per cent are from small towns! And 50 per cent of online transactions happen from these towns! And what about the 423 towns with 1 lakh-plus population?

The marketing man has attempted to cascade his strategies down to the depths of the Indian market. This is a difficult task. But it has begun in earnest, now that the low-hanging fruit of the urban market looks largely harvested. Time to pluck it off the rural market then ... and of course aim to put up those ladders for those that hang higher as well in the near future! 2004 is dead! Long live 2004!

(The author is a business strategy specialist & CEO, Harish BijoorConsults)

Feedback on this special issue of Catalyst may be mailed to bleditor@thehindu.co.in

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