The Hindu Business Line : Of calls and recalls

In the Indian market there are distinct layers. There’s the well-connected and aware creamy layer, the middle layer that’s keen only on the functions and the suspicious third layer. Brand Nokia sells to each of these segments. It needs to manage its image at each of these layers with a different and segmented approach.

Alarm bells ring: Nokia cellphone users across India made a beeline for consumer care centres as soon as Nokia issued an advisory about faulty batteries

The recent Nokia battery recall exercise has hurt brand Nokia. Am I right?

- Vijay Prasad, Chennai

Vijay, there are product advisories and there are product recalls. Product advisories are softer options marketers use to pull out erring products from the market. At times, they use the product advisory as a cautionary mechanism. The product recall exercise, on the other hand, is a more serious issue.

The recent issue with the Nokia battery (I wonder whether we should call it the Matsushita battery issue, as the manufacturer is Matsushita) has had several opinions floating around.

Let’s take this case point by point.

Firstly, I do believe the company has done right. Nokia has acted in the best traditions of responsible corporate behaviour. When in doubt, go ahead and clear the entire issue. Clear out every battery of the default batch and purge the headache, or even the potential of a headache in the future.

Having done that, do I believe that brand Nokia has taken a bit of a beating in the Indian market because of this exercise?

From the manufacturers’ point of view, while everyone is going to town saying that brand Nokia is not hurt at all, particularly as customers respect responsible behaviour in markets, I personally do not subscribe to this view.

Let me explain. The brand is a thought. Brand Nokia is a thought. A thought that at once brings forth images of a good product, an efficient product and a truly world-class offering. A market leader in its space. This thought, I am afraid, is sullied. Soiled if not sullied.

Consumers in the developed markets of the world sure do appreciate responsible corporate behaviour from marketers. I am, however, not sure if the same prevails in less developed consumer markets such as India.

Let’s remember that in the Indian market there are distinct layers. The top creamy layer comprises of consumers who are as connected to the world as any other. They are self-actualising consumers who appreciate the Nokia pull-out and appreciate preventive actions that could cost the company lots in terms of money (an estimated Rs 8 crore in this case). All in the interest of public safety. And company liability, of course.

The next layer is the middle layer of consumers. This layer is functionality-oriented, and is happy that the battery is getting replaced. This layer will harbour a bit of a doubt with respect to the brand name Nokia in future. It will want to investigate more than the phone alone in future. Dealerships where these people buy phones from will be inundated with queries regarding battery safety in the near future for sure.

The third layer is the bottom end of the market. This is a more suspicious layer of the market. This is not such a well-informed segment. It is here that rumours will abound. It is here that competitors will make hay of the issue at hand. Acts of responsible corporate behaviour will not get the kind of appreciation in this segment of the market as they do in the other two layers. Out here, if you have done wrong, you will be punished. Punished unfairly, even.

Brand Nokia sells to each of these segments. It needs to manage its image at each of these layers with a different and segmented approach. The task has just begun. The residue of discontent will remain for a while, I am afraid.

How does a heritage brand happen? What are the qualities that a brand requires to be a heritage brand?

- Vani Shottam, Coimbatore

Vani, heritage brands need to essentially be mass brands. Brands that are accessible to the largest numbers of people. To that extent, in the pyramid of brands, heritage brands are brands that fall in the middle and lower end of the pyramid rather than the top end. Therefore, a Hugo Boss will not be a heritage brand. Instead, it is the MTR pickle, the Liv 52 from Himalaya and the Woodward’s Gripe Water that will qualify better for the status.

The heritage brand is one that stands the test of time, generations of use, generations of utility, and a rather intrinsic relationship with consumers, never mind their age. A Cadbury Dairy Milk would figure in this list as well, on this count.

To stand the test of time, a brand needs to maintain an impeccable line of quality. The brand needs to have had no major incidents of any kind that could scar its image, must be reasonably ubiquitous in its utility, must be solution-oriented and not image-oriented alone (a biscuit vs Swarovski crystals), must be a basic item and not a fad that comes and goes (like a Covo chocolate spread or the Tazo), must be wholesome in its goodness appeal, and preferably taste-driven.

How important is the physical shopping experience at a store to increase sales volume? Or is this a myth of organised retail?

- J. J. Pinto, Mumbai

Dear Pintoji, shopping is a hugely sensorial experience at large. The sensorial experience happens at the level of the visual, the audio, the sense of smell, and more. Offering a sensorial shopping experience provides the space and environment for the consumer to relax and let loose his/her shopping lust.

There is data that we have on hand that says that the actual shopping experience that is positive helps push up topline revenue at the outlet by as much as 65 per cent. And that’s big!

(Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.)

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