The Hindu Business Line : Consumers and evolving markets

EVOLVING markets such as India face marketing challenges which are quite different from the ones which developed markets have in terms of managing brand association, pricing and enhanced levels of consumers' aspirations. For instance, the price war initiated by the well-known brands in the detergent category has literally eliminated the premium segment in terms of price (though there seems to be some low-profile activity by LG with a premium priced brand).

There are too many price points and stock-keeping units (SKUs) across brands in the soaps and confectionery categories. Even in the case of durables, the introduction of product line variants in general is much more than what it was in the past.

There are several aspects which need to be examined in this context. Firstly, the consumer aspires to upgrade (whether this is happening and how this should ideally happen are connected issues). Lifebuoy's repositioning with upgraded variants is an interesting example.

Secondly, the average consumer has become sensitive to value offered by brands, either in terms of price or in terms of the intrinsic benefit offered at a higher price point. The emergence of several discount brands and higher-priced improved offerings in the soap category and biscuit category are examples. Godrej No. 1 is an example of how the brand initiated the strategy of offering several variants (like sandal) in the lower segment when such variants have been associated with higher segments in the category.

Thirdly, apart from expecting value, the consumer is also caught in generic competition which may force him/her to downgrade in a few categories while testing other categories. For instance, the consumer, in order to balance her household budgets, may alternate between a good brand of tea and loose tea and/or a low-priced detergent bar/ a low-priced detergent powder/medium-priced detergent powder.

The behaviour adds a complex twist to the context which makes planning very unpredictable and calls for a dynamic approach (which may also be affected by competitors' moves).

The situation, especially, is complex when too many price points are involved within a narrow price brand offering a vast choice to the consumer (from edible oil to colour television sets). An additional factor is the symbolic orientation which also caters to the psyche of the consumer apart from the functional attributes which may be an important criteria for brand patronage.

This is reflected in mundane products having a strong symbolic orientation. Such communication is on the increase in recent times. Nestle's Sunrise and Select and Bru in the coffee category, Chakra Gold in tea, the warmth behind gifting of a Titan watch and the relationship proposition of Raymond are examples of such communication.

Specifically, three aspects seem to be important in addressing emerging markets through strategies which require dynamic changes when required: Marketing communication, product-line management and changing aspirations of consumers.

Managing brands in emerging markets is much more complex than managing them in evolved markets.

Diversity of segments, appeals, contexts

The following examples and observations from practising managers too provide important inputs to reflect the state of communication in the marketing context today:

Cadbury's Dairy Milk ads showed adults in touch with the child within themselves, thus justifying chocolate consumption as enjoying the taste of life. The second round of ads for the brand showed people giving various excuses about eating the chocolate. It also emphasised certain situations to eat chocolate. This is probably a good example of how markets could be expanded in an emerging market when lifestyle based on Westernisation is gaining ground. (Adults eating chocolates is a Western cultural habit.)

Tata Salt touched on patriotism in its ads by using the words Desh ka namak. Even in this day and age of mercenary materialism and unmitigated cynicism, these simple words had an earthy appeal that went straight to the heart. For cached in this phrase lay all those old-world sentiments of honesty, integrity and loyalty — not to mention patriotism — that stirred the soul. Tata is a brand which has grown with the passage of time and patriotism could probably have an impact as it stands in contrast to the image of Westernisation which is diffusing at a fast pace in several product categories.

In an emerging market such as India, there is a need for marketers to take into consideration the `rural-urban' similarities as well as the `rural-urban' divide. The similarity relates to consumer perception concerned with specifically certain categories such as soft drinks, apparel, shampoo and chocolates. Aspiration-based or fun-oriented appeals could be used to address both markets.

Language variations may call for regional variants — Coke and Fanta are examples in which regional celebrities are used besides regional language execution). Aspiration could be lifestyle-based or functionality-based.

Lifebuoy's family heath repositioning on hygiene is another example of how marketing communication should take into account changing consumer aspirations. The brand also has different variants and SKUs. In certain other categories such as detergent bars or floor cleaning solutions, there may have to be more of application/awareness appeals. A brand may, for example, explain how the detergent bar is best suited to the type of water in a specific region or create awareness about using a powerful floor cleaning solution. The type of market matters. Even in a lifestyle-based category such as soft drinks, a niche drink has to be treated differently. For example, Red Bull, a fast-growing energy drink, uses daredevil/adventure sports associations, which is in tune with the changing aspirations of the youth. Given the niche orientation of the drink, the same strategy could work well for the brand in the Indian context too.

For a brand like Lux that was in the maturity stage, Hindustan Lever used an innovative technology to involve the customer in its print ads. It used ultraviolet ray-sensitive printing inks in a picture of a woman that darkened when exposed to sunlight. An established brand like Lux needs to cut through the clutter to grab attention, even before the consumer begins to perceive the benefits from the improved brand. In an environment where the consumer was being loaded with various exchange offers, LG differentiated its products on the basis of technology, the advertising of which appealed to the emotion of the Indian consumer rationally. This helped LG build a strong bond with its consumers. The emotion was appropriately backed up by "new to the Indian market" features.

Soap market in India

Bath and shower products also have the highest penetration and awareness levels in both urban and rural markets in India. The regional markets for bar soap and talcum powder products are saturated, with a plethora of brands and products vying for the consumer's disposable income. Bath and shower products remained the largest category within the Indian cosmetics and toiletries market in 2003, and accounted for 39 per cent of total market value sales.

Urban penetration is almost completely saturated while rural pockets continue to shoulder the weight of national progress. With demand rising for other non-consumer durables, regional consumers are downgrading to cheaper bar soaps, or bar soaps which come with giveaways, discounted prices, or promotional offers, as they are then good value for money.

The table shows how the industry in India classifies the various price segments of bar soap products.

With the premium end shrinking, most companies are finding consolation within the popular segment. One of the reasons for the decline in the value size of the market was improvement of quality. With technological advancements, the TFM (total fatty matter) content improved, so consumers have to use less soap to clean better. Dove, Dettol and Mysore Sandal Gold are positioned as super premium brands while Nirma, Cinthol and Lux belong to the popular category. Lifebuoy and Godrej No 1 are in the discount category/higher end of the discount category while the carbolic category almost ceased to exist with the repositioning of Lifebuoy in 2002. Bar soap products with added-value skin care benefits are fast gaining popularity. Most price bands have several price points/variants aimed at either upgrading the consumer temporarily or permanently. A consumer can once in a way (depending on the pressure on his generic expenses across categories) try out a higher priced variant of a brand or a higher priced brand from the same company or get upgraded (as a part of the regular purchase cycle) to a higher priced offering because of his/her enhanced affordability at that point in time.

There is a lot of advertising activity in the soap category. Certain brands extol functional benefits such as smell, reducing body odour, freshness, being recommended by doctors and such. There are certain other brands that highlight their symbolic benefits, like making one feel like a star, increasing one's popularity, a caring mother's choice and so on. A situational context is also built into the advertising of soaps that promise fairness and protection from UV rays. The presence of functional as well as symbolic benefits in advertisements as well the situational context makes the soap category a fit case to explore the effect of expansion advertising as a precursor to brand loyalty.

Balancing functional benefits, symbolic appeals and timing the right combination of good functional attributes and symbolic brand orientation (which can be beyond advertising like an event associated with beauty care/hair care) within a price band is likely to be a conceptual approach to get over the complexities of the FMCG markets.

Price band focus explores the possibility of consumer upgrade. Evolving markets and their diversities demand much more than just creative advertising, either for new or established brands.

(Ramesh Kumar is Professor of Marketing, IIM-Bangalore, and Aalap Sharma is a business leadership trainee at Hindustan Lever Ltd.)

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