The last couple of months have been nothing but tough for companies in India. FMCG sales are down by Rs. 3,800 crore, and consumer durables sales are down by 40%. The auto industry too is affected, but with different intensities across segments.
So companies are trying their best, by going digital / cashless.
And while business is hopeful, brands are panicking – everyone is adapting to this new trend so fast, that it has already become old news for consumers. “Cashless / Digital payment” is already the new clutter.
Here’s what can help your brand.
Step 1: Stop that advertisement release
Releasing a full page advertisement in the newspaper will make top management, investors, and partners happy, but it will do little to boost your sales, simply because your entire finance, logistics, and distribution network isn’t perhaps ready yet. Therefore, choose your media wisely, and cascade your message through targeted channels only to your most critical audiences – company newsletter, SMS, even WhatsApp groups can come in handy.
To add credibility, put up an announcement on your website, and add that link to all outgoing messages in other channels.
Step 2: Create a G-T-M plan
Going cashless will change and challenge many existing practices within your organisation. Hence, treat this new step like a product launch, and prepare a full go-to-market plan. Talk to all stakeholders and see if they are ready to switch to cashless, and also if your infrastructure is ready to handle the estimated boost in new traffic.
Step 3: Prepare a promo plan
It is very likely that by now, your consumers have already tried something from your competitors, and are frustrated with the problems they had to face. Here, your readiness is your biggest differentiator! Come up with promotions that leverage this – bulk promotions, cross-selling, preferred treatment, ready delivery, etc. And while you are at it, go for new partnerships and tie-ups too.
Step 4: Now, release that ad!
But only targeted at geographies where you are ready. With today's tools, most media can be geo-targeted. Explore digital too. After all, the consumers are already there, and they are most ready for digital transactions.
Step 5: Track all your efforts
When a business goes digital, a lot more data becomes available at every stage of the transaction. And at a much shorter lead time too. Wash, rinse, repeat.
Happy New Year!
Got more ideas? Feel free to add in the comments.
Dec 2, 2016
Can Colgate toothpaste go beyond Patanjali?
Leader brands usually find themselves in situations where they are working hard on keeping challengers at bay, instead of looking for new ways to grow. Colgate’s present situation in India seems to be similar.
In 2015-16, Colgate’s market share was 55.7% in toothpastes and 46.2% in toothbrushes. Considering that next 2 players in the market are Hindustan Unilever and Dabur, competition is obviously tough and has deep pockets too. But when newspaper reports start talking about new entrant Patanjali’s herbal toothpaste making a dent at the market leader, you know the battle is being fought for each basis point of market share.
But it shouldn’t be this way.
The oral care market still holds big growth potential!
Per capita toothpaste consumption in India (136 grams) is way lower than China (264 gms) and Brazil (617 gms). And the prices are even lower – providing scope of ‘premiumisation’. Colgate’s own value-added line contributed to just 20% of its sales in FY 2015.
So what has Colgate done to grow?
A lot. Through its ‘Bright Smiles, Bright Futures’ program, it has reached more than 135mn school children across 2mn schools. Its other program ‘Oral Health Month’ benefitted almost 6 million in FY 2016 alone. But these activities are expensive, and involve multiple logistical issues and free giveaways, not to mention the renewed dedication of the entire team year on year.
Are there better ways?
Yes – Using brand strengths
I have always believed that the biggest results come when consumer insights, brand strategy and business goals come together.
Last year, we saw the brand leverage its consumer base through advertising, where mothers talked about their trust for Colgate. But I guess it wasn’t very effective, not because of the ad, but because it didn’t use its biggest strength. Colgate has another franchise more powerful than mothers – dentists. For years, the brand used dentists to claim superiority and preference… Dentists, not mothers!
So let’s use this strength some more, and grow the market!
Consumption in the personal care category generally is habitual – patterns for quantity, purchase, brand choice, etc. are set. Even this brand with all its might has achieved limited success in making people brush twice a day. The Mother’s Trust TV ad, too, talks about not switching from Colgate to other brands - almost suggesting 'hey people, stick to your habits!'
But using dentists could change that, and here’s an idea about it.
The growth potential for toothpaste exists because of low per capita consumption and scope for premiumisation, and dentists can help us drive this growth more than anyone else. All we need to do is drive consumers to dentists.
Consider this.
Indians consume less than 150 grams of toothpaste per capita. That translates to just Rs. 60. In comparison, we spend more on bike servicing (avg. Rs. 150-200 at least twice a year), on haircuts (~Rs. 50 every month), and on mobile phone recharges (monthly ARPU ~Rs. 125).
Using this comparison persuasively can push people to get more involved with oral care. Similar comparisons, if made for preventive oral care versus corrective treatments, can also persuade people to visit their dentists more often. Pushing this further, months in a calendar can be designated as dental check-up months to suggest multiple options in a year – June and December as after-vacation months and being 6 months apart, fit the bill quite well.
Would this work?
Targeting a change in behaviour is tougher than proposing a feel-good idea. But leader brands across categories have taken up causes of all sorts to drive both brand and business metrics. Ariel asks men to ‘Share the Load’ of doing laundry, while Dettol urges mothers not to stop their kids from playing. Surf Excel recently rolled out a TVC where they said prison inmates spend more time in the open than kids. This was part of its ‘Dirt is Good’ campaign.
So yes, it can work wonders.
What do you think?
In 2015-16, Colgate’s market share was 55.7% in toothpastes and 46.2% in toothbrushes. Considering that next 2 players in the market are Hindustan Unilever and Dabur, competition is obviously tough and has deep pockets too. But when newspaper reports start talking about new entrant Patanjali’s herbal toothpaste making a dent at the market leader, you know the battle is being fought for each basis point of market share.
But it shouldn’t be this way.
The oral care market still holds big growth potential!
Per capita toothpaste consumption in India (136 grams) is way lower than China (264 gms) and Brazil (617 gms). And the prices are even lower – providing scope of ‘premiumisation’. Colgate’s own value-added line contributed to just 20% of its sales in FY 2015.
So what has Colgate done to grow?
A lot. Through its ‘Bright Smiles, Bright Futures’ program, it has reached more than 135mn school children across 2mn schools. Its other program ‘Oral Health Month’ benefitted almost 6 million in FY 2016 alone. But these activities are expensive, and involve multiple logistical issues and free giveaways, not to mention the renewed dedication of the entire team year on year.
Are there better ways?
Yes – Using brand strengths
I have always believed that the biggest results come when consumer insights, brand strategy and business goals come together.
Last year, we saw the brand leverage its consumer base through advertising, where mothers talked about their trust for Colgate. But I guess it wasn’t very effective, not because of the ad, but because it didn’t use its biggest strength. Colgate has another franchise more powerful than mothers – dentists. For years, the brand used dentists to claim superiority and preference… Dentists, not mothers!
So let’s use this strength some more, and grow the market!
Consumption in the personal care category generally is habitual – patterns for quantity, purchase, brand choice, etc. are set. Even this brand with all its might has achieved limited success in making people brush twice a day. The Mother’s Trust TV ad, too, talks about not switching from Colgate to other brands - almost suggesting 'hey people, stick to your habits!'
But using dentists could change that, and here’s an idea about it.
The growth potential for toothpaste exists because of low per capita consumption and scope for premiumisation, and dentists can help us drive this growth more than anyone else. All we need to do is drive consumers to dentists.
Consider this.
Indians consume less than 150 grams of toothpaste per capita. That translates to just Rs. 60. In comparison, we spend more on bike servicing (avg. Rs. 150-200 at least twice a year), on haircuts (~Rs. 50 every month), and on mobile phone recharges (monthly ARPU ~Rs. 125).
Using this comparison persuasively can push people to get more involved with oral care. Similar comparisons, if made for preventive oral care versus corrective treatments, can also persuade people to visit their dentists more often. Pushing this further, months in a calendar can be designated as dental check-up months to suggest multiple options in a year – June and December as after-vacation months and being 6 months apart, fit the bill quite well.
Would this work?
Targeting a change in behaviour is tougher than proposing a feel-good idea. But leader brands across categories have taken up causes of all sorts to drive both brand and business metrics. Ariel asks men to ‘Share the Load’ of doing laundry, while Dettol urges mothers not to stop their kids from playing. Surf Excel recently rolled out a TVC where they said prison inmates spend more time in the open than kids. This was part of its ‘Dirt is Good’ campaign.
So yes, it can work wonders.
What do you think?
Nov 10, 2016
Demonetisation - an assessment using the Effectiveness Approach
For a few years, my job involved working on tracking advertising effectiveness, and I co-authored an entry that won a Gold at the IPA Effectiveness Awards. This is only to establish that while the below analysis is way out of my league, the logic behind it has been well thought of. Do feel free to poke loopholes, and I will try to reassess accordingly.
On 8 Nov. 2016, India demonetized Rs. 500 and Rs. 1,000 notes with immediate effect. It has been widely proclaimed as a great step in curbing black money in the country. Now, while the move is bold and brave no doubt, I invite you to consider a possibility that the impact may not be as big as it is thought out to be.
Estimating cost of printing new notes At its press conference, the RBI said that it estimates 16.5 billion Rs. 500 notes, and 6.7 billion Rs. 1000 notes to be in circulation. This doesn’t add up according to my calculations.
As mentioned in an article by the RBI, the currency in circulation in recent years is roughly 10% of GDP. Thus, based on the IMF estimate of USD 2.25 trillion for India’s 2016 GDP, and exchange rate of Rs. 66.5 to a dollar, the currency in circulation would be Rs. 14,963 trillion in 2016.
Again, according to the same RBI article, Rs. 500 and Rs. 1,000 are total 47% and 32% of value of money respectively in circulation. Then, total no. of currency notes to be replaced will be:
Anyway, let’s go with the RBI-quoted figure of 16.5 billion and 6.7 billion notes respectively.
In one day, roughly 23.2 billion currency notes stopped being legal tender! Take some time to process that number.
For cost of printing, a Mint analysis (which is brilliant, by the way!) quotes RBI information that cost of printing new currency notes are Rs. 2.5 for a 50-rupee note and Rs. 3.17 for a 1,000-rupee note. The new notes will be more expensive to print due to costs of designing and adding new security features. But since the volume to be printed would be large too, let’s go only a little higher for pegging the cost of printing –Rs. 2.6 for a 50-rupee note and Rs. 3.5 for a 2,000-rupee note.
Let’s say we replace all old Rs. 50 notes with new Rs. 50 notes, and all Rs. 1,000 notes with Rs. 2,000 in equivalent value. The cost of printing these many notes will be:
On 8 Nov. 2016, India demonetized Rs. 500 and Rs. 1,000 notes with immediate effect. It has been widely proclaimed as a great step in curbing black money in the country. Now, while the move is bold and brave no doubt, I invite you to consider a possibility that the impact may not be as big as it is thought out to be.
Estimating cost of printing new notes At its press conference, the RBI said that it estimates 16.5 billion Rs. 500 notes, and 6.7 billion Rs. 1000 notes to be in circulation. This doesn’t add up according to my calculations.
As mentioned in an article by the RBI, the currency in circulation in recent years is roughly 10% of GDP. Thus, based on the IMF estimate of USD 2.25 trillion for India’s 2016 GDP, and exchange rate of Rs. 66.5 to a dollar, the currency in circulation would be Rs. 14,963 trillion in 2016.
Again, according to the same RBI article, Rs. 500 and Rs. 1,000 are total 47% and 32% of value of money respectively in circulation. Then, total no. of currency notes to be replaced will be:
Anyway, let’s go with the RBI-quoted figure of 16.5 billion and 6.7 billion notes respectively.
In one day, roughly 23.2 billion currency notes stopped being legal tender! Take some time to process that number.
For cost of printing, a Mint analysis (which is brilliant, by the way!) quotes RBI information that cost of printing new currency notes are Rs. 2.5 for a 50-rupee note and Rs. 3.17 for a 1,000-rupee note. The new notes will be more expensive to print due to costs of designing and adding new security features. But since the volume to be printed would be large too, let’s go only a little higher for pegging the cost of printing –Rs. 2.6 for a 50-rupee note and Rs. 3.5 for a 2,000-rupee note.
Let’s say we replace all old Rs. 50 notes with new Rs. 50 notes, and all Rs. 1,000 notes with Rs. 2,000 in equivalent value. The cost of printing these many notes will be:
We would spend Rs. 54.63 billion to print the new currency notes only for replacing old currency!
Before we look at other costs of this massive decision, let’s look at the benefits arising from this. The two big benefits expected from this move are curbing black money and curbing funding of terrorist activities.
Estimating impact on Black Money: The press release of the announcement puts the value of the black economy in India at 23.2% of GDP in 2007. Considering that same ratio for 2016, while highly unlikely, gives us a figure of Rs. 34,713 Trillion. However, not all of it is cash. In fact, a huge proportion of it will be in the form of real estate, gold jewellery and investments. Replacing currency notes doesn’t affect this at all.
So how much of black economy does it affect?
The black economy would have limited financial services as its disposal, but it would also have fewer participants, hence, fewer hands to exchange. Therefore, purely as a guess, let’s say the currency required for the black economy to operate is half of what is required for the white economy. Thus, 5% or Rs. 1,736 trillion will have to be replaced by black marketers in the event of replacement of currency notes.
Note that this Rs. 1,736 trillion turns out to be only 15% of the total currency in circulation in 2016 – Rs. 14,963 trillion. Doesn’t feel good, right? Ok, let’s push our original guess of 5% to 10%, so that this ratio goes up to 30%.
So does all of this cash become “white money”?
Not really, since black marketers can continue exploiting all existing loopholes to plough this same cash back into the black economy. But let’s still consider that this becomes white.
Reversing the Currency-to-GDP ratio, this will grow India’s GDP by Rs. 34,720 trillion in the first year. Converting black money to white by itself doesn’t matter much, what really matters to the government and to us, is the tax income generated from it.
Estimating incremental tax income Last year, the income from Central Taxes to the government was about 0.01% of GDP (Rs. 14.6 trillion on Rs. 1,37,855 trillion), thus, this new white money will give the govt. Rs. 3.47 Trillion more money.
Note that we will spend only 2% of that amount in printing new currency! Cool!!
Estimating impact on Black Money: The press release of the announcement puts the value of the black economy in India at 23.2% of GDP in 2007. Considering that same ratio for 2016, while highly unlikely, gives us a figure of Rs. 34,713 Trillion. However, not all of it is cash. In fact, a huge proportion of it will be in the form of real estate, gold jewellery and investments. Replacing currency notes doesn’t affect this at all.
So how much of black economy does it affect?
The black economy would have limited financial services as its disposal, but it would also have fewer participants, hence, fewer hands to exchange. Therefore, purely as a guess, let’s say the currency required for the black economy to operate is half of what is required for the white economy. Thus, 5% or Rs. 1,736 trillion will have to be replaced by black marketers in the event of replacement of currency notes.
Note that this Rs. 1,736 trillion turns out to be only 15% of the total currency in circulation in 2016 – Rs. 14,963 trillion. Doesn’t feel good, right? Ok, let’s push our original guess of 5% to 10%, so that this ratio goes up to 30%.
So does all of this cash become “white money”?
Not really, since black marketers can continue exploiting all existing loopholes to plough this same cash back into the black economy. But let’s still consider that this becomes white.
Reversing the Currency-to-GDP ratio, this will grow India’s GDP by Rs. 34,720 trillion in the first year. Converting black money to white by itself doesn’t matter much, what really matters to the government and to us, is the tax income generated from it.
Estimating incremental tax income Last year, the income from Central Taxes to the government was about 0.01% of GDP (Rs. 14.6 trillion on Rs. 1,37,855 trillion), thus, this new white money will give the govt. Rs. 3.47 Trillion more money.
Note that we will spend only 2% of that amount in printing new currency! Cool!!
But then, we have calculated only first year tax income, that too, only for Central Taxes. What about additional tax income to states, and also the multiplier effect of tax income spent as government's capital expenditure over the years? That will increase the benefit. But, for sake of ease, I assume that this impact gets balanced off by the fact that this tax income to government also takes it away from the hands of people who would have spent it, and that the original amount spent by the government on printing new currency would also have a similar multiplier effect over the years.
Let’s look at the second big benefit – lesser fake money for terrorists.
Fake money estimates An Indiatimes article says that ISI makes a profit of Rs. 500 crore a year by printing fake money and smuggling it into India. Cancelling old notes makes all that money worth nothing, but ISI has already made its profit on that money, so it hardly makes a difference.
Let’s say it takes ISI or its partners a full year to figure out how to make counterfeit new currency notes. Then, it loses Rs. 500 crore in this one year. Now what matters is... how much of ISI’s income comes from printing fake money. We wouldn’t know this.
Let’s look at the second big benefit – lesser fake money for terrorists.
Fake money estimates An Indiatimes article says that ISI makes a profit of Rs. 500 crore a year by printing fake money and smuggling it into India. Cancelling old notes makes all that money worth nothing, but ISI has already made its profit on that money, so it hardly makes a difference.
Let’s say it takes ISI or its partners a full year to figure out how to make counterfeit new currency notes. Then, it loses Rs. 500 crore in this one year. Now what matters is... how much of ISI’s income comes from printing fake money. We wouldn’t know this.
But what we can estimate is that ISI will earn higher profits right from the moment it figures out how to print fake currency notes of Rs. 2,000.
Makes the whole step seem pointless, no?
Let’s assess the third factor now – removing corruption We keep forgetting that the black economy is an economy – meaning it already has figured out the loopholes of the official system, and has been exploiting it for years, perhaps decades! A change in currency notes is nothing more than a speed breaker in the journey.
Will replacing currency notes stop people from asking for dowry, paying ‘donation’ for school admissions and college degrees, escaping tax assessments, asking for undue promotions in government jobs, etc.? No way!
Let’s now come back to the additional costs involved in replacing currency notes in a knee-jerk manner like this.
The biggest cost is of transporting this money all over the country to bank branches and ATMs. It’s difficult to put a number to it.
The next cost is a nominal one – Business lost during this time. A recent nationwide strike of trade unions estimated losses to be in the range of Rs. 180 billion. That’s for a single day, for a section of the entire economy.
In our present case, nearly 80% of all currency notes, Rs. 14,950 billion in value, are rendered useless overnight, and are replaced over 50 days. This is in an economy where 2/3rd of transactions are in cash as per a Hindustan Times article.
During this 50-day period, even if we consider that the impact is equivalent of lost business of only 5 days, it totals to a massive Rs. 0.9 Trillion loss.
Let’s assess the third factor now – removing corruption We keep forgetting that the black economy is an economy – meaning it already has figured out the loopholes of the official system, and has been exploiting it for years, perhaps decades! A change in currency notes is nothing more than a speed breaker in the journey.
Will replacing currency notes stop people from asking for dowry, paying ‘donation’ for school admissions and college degrees, escaping tax assessments, asking for undue promotions in government jobs, etc.? No way!
Let’s now come back to the additional costs involved in replacing currency notes in a knee-jerk manner like this.
The biggest cost is of transporting this money all over the country to bank branches and ATMs. It’s difficult to put a number to it.
The next cost is a nominal one – Business lost during this time. A recent nationwide strike of trade unions estimated losses to be in the range of Rs. 180 billion. That’s for a single day, for a section of the entire economy.
In our present case, nearly 80% of all currency notes, Rs. 14,950 billion in value, are rendered useless overnight, and are replaced over 50 days. This is in an economy where 2/3rd of transactions are in cash as per a Hindustan Times article.
During this 50-day period, even if we consider that the impact is equivalent of lost business of only 5 days, it totals to a massive Rs. 0.9 Trillion loss.
In other words, we would have lost 26% of our incremental tax income expected over the next one year, at the beginning of the exercise itself.
Impact on poor This cost, while not nominal, will be hidden and difficult to estimate too.
According to a 2015 study, while 53% of Indian population has a bank account, it is with a 43% dormancy rate – no deposits or withdrawals in a 12-month period. Again, go back to the previous mentioned cash becoming illegal overnight.
The timing makes it worse too - first week of the month, and just a week after Diwali, when quite a lot of them receive their festival bonus.
Theoretically, it should affect only black money. But we already know black money in cash is only 15-30% of all cash in the economy. Be my guest in estimating the losses Indians will occur!
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Disclaimer: This analysis has been done using all openly available figures and study reports. This massive move will undoubtedly have far-reaching effects in terms of scale and time. I have made an attempt at calculating a short-term impact using my skills from another field. It does not reflect the views of my present or past employers.
According to a 2015 study, while 53% of Indian population has a bank account, it is with a 43% dormancy rate – no deposits or withdrawals in a 12-month period. Again, go back to the previous mentioned cash becoming illegal overnight.
The timing makes it worse too - first week of the month, and just a week after Diwali, when quite a lot of them receive their festival bonus.
Now imagine 125 crore Indians, only 10% of them with an active bank account, scrambling to replace 80% of their cash.
Theoretically, it should affect only black money. But we already know black money in cash is only 15-30% of all cash in the economy. Be my guest in estimating the losses Indians will occur!
---
Disclaimer: This analysis has been done using all openly available figures and study reports. This massive move will undoubtedly have far-reaching effects in terms of scale and time. I have made an attempt at calculating a short-term impact using my skills from another field. It does not reflect the views of my present or past employers.
Oct 25, 2016
Getting better at evaluating TV ad scripts
So a round of script presentation has just gotten over, and the agency team is looking around the room, trying to gauge reactions. The client starts speaking: one element in one script doesn't seem right. He rejects that script. And the downward spiral begins.
Somehow after multiple rounds, a script is approved, and everyone leaves the conference room happy. But when the final ad film is presented, the mood is not as exuberant. Because "the film didn't come out as expected".
So what can be done about it?
Most marketers haven't been through a film-development process, so they don't know what to expect at the intermediate stages. Here is what can help them:
1. Train yourself to visualise an ad from a scriptPick up your favourite movie and look up its script online (one source: The Internet Movie Script Database). For me, it was with 'The Matrix'. But even if it's not a sci-fi film, there will be a lot 'not said' in the script that gets added in the film.
Another option is to read a book that later got made into a movie. Notice how storytelling differs as words and as scenes. The Harry Potter book series, and 'Song of Fire and Ice' series (made into Game of Thrones) can serve as recent references. This will familiarise you with how the script that you are listening to, may look like as the final product.
2. Watch a lot of ads and show-reelsAd film directors, just like movie directors, have their unique way of storytelling. Thus, watching show-reels will get you a sense of how the director would treat the script.
3. Read comic booksSince most popular comic book characters have been around for decades, we can compare how storytelling changes from comics, to animation, to movies, and to TV series. The idea is to see variety rather than linear thinking. At the very least, it broadens our imagination for visualising the scripts.
And, still, the final result could be different!That can still happen, because non-creative people like you and I, go for the familiar, while the creative guys will go for new, different, and unique. But, the output won't come as a shock, rather an improvised version of what you already expected.
Anyway, our objective is to get the right direction, not direct the ad sitting in our armchairs.
Oct 3, 2016
Using Big Data for Strategic Communications
Once upon a time, the marketing department was data-starved and decision-making was largely about following the Marketing Head's gut-feel which in turn was influenced by 'trends' of the time.
Now, as the tsunami of Big Data shifts this decision-making to led-by-data and further to overloaded-by-data, strategy seems to take a backseat. But it doesn't have to be that way.
1. Find the Highest Common Factor, not the Least Common DenominatorMost upselling and cross-selling is based on what was searched and bought recently. This is standard data analysis and cross-tabulation at play. While that is good for incremental sales, it does little to grow large-scale business.
Instead, in a market like India, where the potential to grow the pie is still big, we can use data to solve larger business problems - to go beyond sales pitches, and find behavioural triggers.
For example, online retail seems to be battling slow growth beyond cash-on-delivery. Here, big data can help collate first gifting items purchased for delivery to other addresses - these purchases would automatically push consumers to go for some mode of pre-payment, instead of cash-on-delivery. And once they have experienced this mode, they are ripe for a complete shift away from COD.
Once these ideas are discovered, the appropriate ones can be elevated for ad campaigns too. For example: what if in this ad for Amazon, big data could provide the most correct item to purchase? Perhaps sales growth can see a steeper trajectory.
2. Redefine your segmentation criteriaIn absence of data, segmentation is usually done with geography and demographic variables - age, gender, etc. But with big data, these very factors can be challenged. What if, more than geography (small town / large town / metro), the 'life-stage' of the customer (single / married / married with kids) defined his / her purchase behaviour?
3. Redefine your competitionIn MBA classes, we were told of Coca-Cola's big growth story that came from redefining competition as 'all beverages'. Similarly, using big data, we can redefine our brand's competition based on time and money - instead of just product category. As brands move from mere products to experience (and want to charge a premium for it), this becomes interesting as well as critical.
What do you think?
Any stories to share on Big Data?
Now, as the tsunami of Big Data shifts this decision-making to led-by-data and further to overloaded-by-data, strategy seems to take a backseat. But it doesn't have to be that way.
1. Find the Highest Common Factor, not the Least Common DenominatorMost upselling and cross-selling is based on what was searched and bought recently. This is standard data analysis and cross-tabulation at play. While that is good for incremental sales, it does little to grow large-scale business.
Instead, in a market like India, where the potential to grow the pie is still big, we can use data to solve larger business problems - to go beyond sales pitches, and find behavioural triggers.
For example, online retail seems to be battling slow growth beyond cash-on-delivery. Here, big data can help collate first gifting items purchased for delivery to other addresses - these purchases would automatically push consumers to go for some mode of pre-payment, instead of cash-on-delivery. And once they have experienced this mode, they are ripe for a complete shift away from COD.
Once these ideas are discovered, the appropriate ones can be elevated for ad campaigns too. For example: what if in this ad for Amazon, big data could provide the most correct item to purchase? Perhaps sales growth can see a steeper trajectory.
2. Redefine your segmentation criteriaIn absence of data, segmentation is usually done with geography and demographic variables - age, gender, etc. But with big data, these very factors can be challenged. What if, more than geography (small town / large town / metro), the 'life-stage' of the customer (single / married / married with kids) defined his / her purchase behaviour?
3. Redefine your competitionIn MBA classes, we were told of Coca-Cola's big growth story that came from redefining competition as 'all beverages'. Similarly, using big data, we can redefine our brand's competition based on time and money - instead of just product category. As brands move from mere products to experience (and want to charge a premium for it), this becomes interesting as well as critical.
What do you think?
Any stories to share on Big Data?
Sep 14, 2016
Weaknesses brand 'Patanjali' should watch out for
Brand Patanjali's galloping success is a rare case in the FMCG industry.
But, is it a brand with no weaknesses? Of course not. Here are some:
1. It's a founder-person brandWhile phrase is a made-up one, I think it explains best the category of brands strongly linked to their founders, like Richard Branson and Virgin, and Salman Khan and Being Human.
A large proportion of the brand's power comes from the person behind it, and that may very well cause trouble. We have already seen how the Lokpal movement died after Anna Hazare moved on. Questions were raised on the future of a brand even as strong as Apple after its founder's death.
In its advertisements, there are other endorsers - Hema Malini for biscuits, Sushil Kumar for ghee. But they are not strongly used to build the mother-brand, nor do they carry any past association with Ayurveda.
2. Product quality being questioned, especially in the food categories
When product quality gets questioned, losses pile up, and even loyal customers bid goodbye. Coke, Pepsi, Maggi... the list of strong brands facing PR nightmares is long. Only some, like Cadbury Dairy Milk, were able to bounce back strongly.
In case of Patanjali, its atta noodles product was highlighted in the news for all the wrong reasons. And with the product range getting wider, the connection with Ayurveda becomes weaker. A tomato ketchup from Patanjali may increase sales in the short term, but I have my doubts on its impact on Patanjali's brand value.
With the new announcement on jeans, the brand association seems to be moving away from 'Ayurveda', and towards 'Swadeshi'. While it will help the brand tap a larger potential, the association seems more 'inside-out' at the moment, and it remains to be seen whether or not consumers also make the same connect.
3. Consumer Dissonance
The biggest success factor for Patanjali is the association with a healthier way of living - Yoga and Ayurveda. This image / perception can trump Science, by evoking association with artificial, cosmetics, chemicals, etc., and can make consumers feel happy that they are moving towards a way of life closer to nature.
But habits are tough to break, and the newly built Yoga regimen will soon be given up in exchange for an extra half hour of much-needed sleep. Then, every purchase of Patanjali would increasingly remind consumers of their broken promises to themselves. Big risk!
If the 'Swadeshi' hook takes off positively among consumers, the 'Ayurveda' association can take a backseat, and perhaps avoid this dissonance altogether. However, with that, the food section of Patanjali's product range will lose its biggest differentiator too. Tough task ahead.
Of course, for now, these are mere theoretical possibilities, and Brand Patanjali can rest on its laurels, as its products continue to topple competition at retail counters. So for now, other brands would simply have to try to ride this wave of healthy living.
Or perhaps, they could stage a comeback using positive associations with science and technology, or by using rational arguments of superior product quality (like Heinz ketchup tried last year)?
What do you think?
But, is it a brand with no weaknesses? Of course not. Here are some:
1. It's a founder-person brandWhile phrase is a made-up one, I think it explains best the category of brands strongly linked to their founders, like Richard Branson and Virgin, and Salman Khan and Being Human.
A large proportion of the brand's power comes from the person behind it, and that may very well cause trouble. We have already seen how the Lokpal movement died after Anna Hazare moved on. Questions were raised on the future of a brand even as strong as Apple after its founder's death.
In its advertisements, there are other endorsers - Hema Malini for biscuits, Sushil Kumar for ghee. But they are not strongly used to build the mother-brand, nor do they carry any past association with Ayurveda.
2. Product quality being questioned, especially in the food categories
When product quality gets questioned, losses pile up, and even loyal customers bid goodbye. Coke, Pepsi, Maggi... the list of strong brands facing PR nightmares is long. Only some, like Cadbury Dairy Milk, were able to bounce back strongly.
In case of Patanjali, its atta noodles product was highlighted in the news for all the wrong reasons. And with the product range getting wider, the connection with Ayurveda becomes weaker. A tomato ketchup from Patanjali may increase sales in the short term, but I have my doubts on its impact on Patanjali's brand value.
With the new announcement on jeans, the brand association seems to be moving away from 'Ayurveda', and towards 'Swadeshi'. While it will help the brand tap a larger potential, the association seems more 'inside-out' at the moment, and it remains to be seen whether or not consumers also make the same connect.
3. Consumer Dissonance
The biggest success factor for Patanjali is the association with a healthier way of living - Yoga and Ayurveda. This image / perception can trump Science, by evoking association with artificial, cosmetics, chemicals, etc., and can make consumers feel happy that they are moving towards a way of life closer to nature.
But habits are tough to break, and the newly built Yoga regimen will soon be given up in exchange for an extra half hour of much-needed sleep. Then, every purchase of Patanjali would increasingly remind consumers of their broken promises to themselves. Big risk!
If the 'Swadeshi' hook takes off positively among consumers, the 'Ayurveda' association can take a backseat, and perhaps avoid this dissonance altogether. However, with that, the food section of Patanjali's product range will lose its biggest differentiator too. Tough task ahead.
Of course, for now, these are mere theoretical possibilities, and Brand Patanjali can rest on its laurels, as its products continue to topple competition at retail counters. So for now, other brands would simply have to try to ride this wave of healthy living.
Or perhaps, they could stage a comeback using positive associations with science and technology, or by using rational arguments of superior product quality (like Heinz ketchup tried last year)?
What do you think?
Getting started with a Creative Brief
Have you ever tried to crack a joke, and then, suddenly realised it
didn't land right? That's pretty much how creative briefs land too, when
not written appropriately.
I realised this largeness of this problem only when a creative director pointed it out. We were in a client meeting discussing timelines, when this CD said that we need to accommodate at least 2 rounds of scripts presentation. He reasoned, the client knows what he wants only after he hears the Round 1 scripts.
So how do we avoid this? We can start by ensuring that the brief covers everything we want in the resulting ad.
If the ad has to be clutter-breaking, the brief should explain what the clutter is.
If the ad has to comprehendible, the brief should state what the intended message is.
If the ad has to be memorable, the brief should state what the killer insight is.
Most importantly,
If the ad has to be effective, the brief should cover the expected effect, and how it is communication that will affect it.
1. Explaining the Clutter:
Most briefs mention only a marketing-led background. We need to also mention what brands, products, and ads exist in the marketplace. If the brand is a challenger-brand, the brief needs to explain what brands we are challenging. If we are also challenging category codes of communication, Semantics is a brilliant tool to identify these codes.
Take the deodorant category for example. A clutter defined as 'Foreign lifestyle' will lead to desi contexts of Wild Stone's ads (one of them here). Alternatively, if it got defined as 'sex and sensuality', it will lead to Fogg's new ad.
2. Stating the intended message:
This would probably be the brand proposition itself. In case, the proposition has been around for a long time, it will be in the context of a new product / consumer insight. The simpler this message, the more hard-hitting the output can be. Think Fevicol.
3. Stating the insight:
Of course, this term is extensively abused. But that doesn't mean it is irrelevant. Without an insight, even a great product feature (the intended message) will lose its memorability. Continuing with the example, notice how most memorable Fevicol work (not necessarily the most awarded work) is in the context of fragility. Strength of bonding can best be highlighted amidst things that are prone to falling apart. Or for that matter, Ceat tyres' ads on importance of good grip.
4. Covering the expected effect:
As advertising becomes more effectiveness-oriented, this part is the key. In a way, it connects the brief to the marketing problem. Explaining the role of communication is important too. It converts the marketing problem into a communication problem, so that advertising can solve it. At Ogilvy, we were asked to follow the Do Brief. More about the approach here.
Is this the best structure to write a brief? It's not. It's just one of many.
Nor is this brief required in all cases. Sometimes, a celebrity or just a catch-phrase can work wonders.
In other cases, though, this outline (and the work that goes in writing it) can increase your chances of striking a good idea.
---
Note: While Ogilvy is an ex-employer, the objective here is to use examples, where to some extent, I was aware of the development process. Taking other examples would be just hypothesising how the ad came to be.
I realised this largeness of this problem only when a creative director pointed it out. We were in a client meeting discussing timelines, when this CD said that we need to accommodate at least 2 rounds of scripts presentation. He reasoned, the client knows what he wants only after he hears the Round 1 scripts.
So how do we avoid this? We can start by ensuring that the brief covers everything we want in the resulting ad.
If the ad has to be clutter-breaking, the brief should explain what the clutter is.
If the ad has to comprehendible, the brief should state what the intended message is.
If the ad has to be memorable, the brief should state what the killer insight is.
Most importantly,
If the ad has to be effective, the brief should cover the expected effect, and how it is communication that will affect it.
1. Explaining the Clutter:
Most briefs mention only a marketing-led background. We need to also mention what brands, products, and ads exist in the marketplace. If the brand is a challenger-brand, the brief needs to explain what brands we are challenging. If we are also challenging category codes of communication, Semantics is a brilliant tool to identify these codes.
Take the deodorant category for example. A clutter defined as 'Foreign lifestyle' will lead to desi contexts of Wild Stone's ads (one of them here). Alternatively, if it got defined as 'sex and sensuality', it will lead to Fogg's new ad.
2. Stating the intended message:
This would probably be the brand proposition itself. In case, the proposition has been around for a long time, it will be in the context of a new product / consumer insight. The simpler this message, the more hard-hitting the output can be. Think Fevicol.
3. Stating the insight:
Of course, this term is extensively abused. But that doesn't mean it is irrelevant. Without an insight, even a great product feature (the intended message) will lose its memorability. Continuing with the example, notice how most memorable Fevicol work (not necessarily the most awarded work) is in the context of fragility. Strength of bonding can best be highlighted amidst things that are prone to falling apart. Or for that matter, Ceat tyres' ads on importance of good grip.
4. Covering the expected effect:
As advertising becomes more effectiveness-oriented, this part is the key. In a way, it connects the brief to the marketing problem. Explaining the role of communication is important too. It converts the marketing problem into a communication problem, so that advertising can solve it. At Ogilvy, we were asked to follow the Do Brief. More about the approach here.
Is this the best structure to write a brief? It's not. It's just one of many.
Nor is this brief required in all cases. Sometimes, a celebrity or just a catch-phrase can work wonders.
In other cases, though, this outline (and the work that goes in writing it) can increase your chances of striking a good idea.
---
Note: While Ogilvy is an ex-employer, the objective here is to use examples, where to some extent, I was aware of the development process. Taking other examples would be just hypothesising how the ad came to be.
When are research scores comparable (and when are they not)?
"Let's not compare apples and oranges"
This phrase has led many a meeting astray. But it isn't completely misused. Before we compare any research findings, we need to agree on whether those findings are indeed comparable.
But, as we have seen earlier, whether we accept or reject findings depends as much on our prejudices as on our understanding of research. And if we disagree with the findings, we are more likely to believe the comparison itself is invalid.
So, how then, can we be sure that we are making like-to-like comparisons?
The guiding principle here comes from the way laws of economics are written - 'ceteris paribus'. Latin for 'All other things being the same', it sets the condition right at the beginning - that all variables other than the ones being compared are either constant, or their impact has been identified and accounted for.
Example 1: Comparing impact of an ad campaign across 2 bursts
If we see Burst 2 result in better sales than Burst 1, we need to first check if the distribution was already in place when Burst 1 was launched. Alternatively, when Burst 1 performed better, it could be a result of a retailer incentive program that didn't get rolled out along with Burst 2.
Example 2: Comparing an ad campaign across multiple geographies
Competition and Culture vary greatly across geographies. If a campaign for breakfast cereals does well in City 1 versus City 2, it could be a result of different breakfast habits, and different competing breakfast foods and not so much the ad itself.
Example 3: Comparing brand growth over long term using tracking studies
While working on evaluating a brand's long term ad campaign, we saw that while overall the ad had a positive impact, the sales actually dropped in some years when the ad was on air. A little digging revealed that the industry itself went through a slump during that time, and thanks to the ad campaign, this brand performed better than industry. Quite revealing how 'success' and 'failure' got redefined with just one additional factor included in the analysis!
What about your data?
Any interesting comparisons?
This phrase has led many a meeting astray. But it isn't completely misused. Before we compare any research findings, we need to agree on whether those findings are indeed comparable.
But, as we have seen earlier, whether we accept or reject findings depends as much on our prejudices as on our understanding of research. And if we disagree with the findings, we are more likely to believe the comparison itself is invalid.
So, how then, can we be sure that we are making like-to-like comparisons?
The guiding principle here comes from the way laws of economics are written - 'ceteris paribus'. Latin for 'All other things being the same', it sets the condition right at the beginning - that all variables other than the ones being compared are either constant, or their impact has been identified and accounted for.
Example 1: Comparing impact of an ad campaign across 2 bursts
If we see Burst 2 result in better sales than Burst 1, we need to first check if the distribution was already in place when Burst 1 was launched. Alternatively, when Burst 1 performed better, it could be a result of a retailer incentive program that didn't get rolled out along with Burst 2.
Example 2: Comparing an ad campaign across multiple geographies
Competition and Culture vary greatly across geographies. If a campaign for breakfast cereals does well in City 1 versus City 2, it could be a result of different breakfast habits, and different competing breakfast foods and not so much the ad itself.
Example 3: Comparing brand growth over long term using tracking studies
While working on evaluating a brand's long term ad campaign, we saw that while overall the ad had a positive impact, the sales actually dropped in some years when the ad was on air. A little digging revealed that the industry itself went through a slump during that time, and thanks to the ad campaign, this brand performed better than industry. Quite revealing how 'success' and 'failure' got redefined with just one additional factor included in the analysis!
What about your data?
Any interesting comparisons?
Apr 26, 2016
Why we still need research...
Our professor of business strategy used to
ridicule research. He would say, "BMW doesn't go around carrying
questionnaires, asking customers what want." Over the years, the
standard example has shifted from automobiles to mobiles (specifically
iPhone), but the argument has remained more or less the same.
But there's another point of view too. And it puts forward some very critical reasons why research is helpful.
1. Your customers live in all kinds of un-imaginable infrastructures
If you are reading this on LinkedIn, it is very likely that people in your city don't face problems with electricity and water supply. So, would you be able to understand if your consumers live with 4 hours of daily power-cuts, or get water for only a couple of hours a day? Would you be able to truly appreciate all the tricks and jugaad employed every 'day in the life of' your consumers?
2. You can't un-learn certain ways of life
For the longest part of my life, I would use public transport and auto-rickshaws for all travel, everywhere. But within a few months of buying a bike, I would feel odd about using public transport. Suddenly, travelling by auto-rickshaws felt ridiculously expensive. My outlook to money changed after I started earning. These are changes that you can't undo to imagine life without them. Can you imagine people of your age not owning a smartphone?
3. Everyone has their own unique combination of attitudes, values, and morals
What would you say about a mother who buys branded diapers for the son, and locally made stuff for her daughter? Or about a hospital that charges you 1.5% extra for paying through credit card?
Yes, perhaps the professor was right about questionnaires. We don't need to use them in every situation. But, research is a much larger, and wider field than just questionnaires. And it offers many tools that enlighten the world around us. Why stay in the dark!
But there's another point of view too. And it puts forward some very critical reasons why research is helpful.
1. Your customers live in all kinds of un-imaginable infrastructures
If you are reading this on LinkedIn, it is very likely that people in your city don't face problems with electricity and water supply. So, would you be able to understand if your consumers live with 4 hours of daily power-cuts, or get water for only a couple of hours a day? Would you be able to truly appreciate all the tricks and jugaad employed every 'day in the life of' your consumers?
2. You can't un-learn certain ways of life
For the longest part of my life, I would use public transport and auto-rickshaws for all travel, everywhere. But within a few months of buying a bike, I would feel odd about using public transport. Suddenly, travelling by auto-rickshaws felt ridiculously expensive. My outlook to money changed after I started earning. These are changes that you can't undo to imagine life without them. Can you imagine people of your age not owning a smartphone?
3. Everyone has their own unique combination of attitudes, values, and morals
What would you say about a mother who buys branded diapers for the son, and locally made stuff for her daughter? Or about a hospital that charges you 1.5% extra for paying through credit card?
Yes, perhaps the professor was right about questionnaires. We don't need to use them in every situation. But, research is a much larger, and wider field than just questionnaires. And it offers many tools that enlighten the world around us. Why stay in the dark!
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