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MARKETING It's the product, silly It is, arguably, the most successful premium ready-to-wear garment brand launched in the last 10 years, but its ads have never tried to portray an aspirational lifestyle. Nor is a with-the-times attitude the essence of ColorPlus' advertising. No, the central protagonist of all advertising for the brand is-and has been for the last 7 years-the product itself. ColorPlus isn't isolated in its approach: competition is forcing many companies to stop shouting themselves hoarse about USPS (Unique Selling Propositions) that only they can believe will sell, and peddle product-benefits. Says Raj Jain, 40, Executive Director (Marketing, Sales, and Service), Whirlpool India: ''... one had better get direct and fast.'' Seconds Ajay Kapila, 36, Vice-President (Marketing & Sales), LG Electronics India: ''Consumers seek product benefits and tend to remember brands that (claim to) fulfil that promise.'' Marketers should surely have foreseen this back-to-basics trend. As long as there were four, may be five, products competing for the consumer's attention in a category, each could spin its own intangible differentiator around lifestyles, values, and attitudes. The minute there were more, this approach became impractical. Customers found it difficult to distinguish between competing brands that tried to associate themselves with similar aspirational values. The simplest way to cut through the clutter? An emphasis on product benefits. Not only does this approach bestow brands with strong tangible benefits, it ensures a sufficient bang for the promotional buck. Explains Gopinath Menon, 38, Executive Media Director, TBWA Anthem: ''The cost of promotions has to be offset by incremental sales.'' The caveat? Companies need to look not just for any product benefit but one that is relevant to the consumer. Whirlpool, for instance, found that most customers associated refrigerators with ice and cooling. The company also discovered that the upwardly mobile consumer was mortified at the thought of having to borrow ice. The company merged the two findings to create its hummable ''Ice, Ice'' campaign. Says Jain: ''... since ice itself is a very sterile concept, we felt the need to add a human element to our campaign.'' If it is tangible benefits consumers are after, doesn't it make sense for companies to just slash prices and wait for the products to sell themselves on this plank? Not really, believes Kapila: ''Discounts will work only if the consumer is convinced about the product.'' Evidently, an increasing number of companies are realising that no advertising can be better than the product advertised. -Shamni Pande GLOBAL BRANDS Trust cultural differences to scotch the best-laid plans of mice and men (brewers, actually). Dutch-beer major Heineken is the latest to try its hand at storming the beer market in India. Only, other transnational beer-brands like Foster's, Stroh's, San Miguel, Henninger, and Haakebeck are still trying to make their mark. The reasons for their failure to become everyone's favourite burp range from the regulatory to the geographical. Avers Zinia Lawyer, 47, Director, Associated Breweries Distilleries (ABD): ''Most of these brands are manufactured by single brewery owners who can't compete with multi-brewery owners (when it comes to reach).'' And with excise laws varying from state to state, the interstate movement of beer is a complex, time-consuming process. Thus, Fillipino beer San Miguel, which is brewed by ABD, is available in Maharashtra, Karnataka, Daman, Diu, and Delhi. Australian beer Foster's is also available only in the western part of the country; and German beers Henninger and Haakebeck in the northern region. Henninger did attempt an entry into Maharashtra, Bihar, West Bengal, Orissa, and Assam, but failed. The only brand that has cause to celebrate is Stroh's, which is available in 10 states across the North and the East and even that has managed to sell a mere 4.5 lakh cases since its launch in July, 1999. In what's bad news for foreign beers, the Indian beer market is undergoing a shift which is unconducive to the well-being of mild beers. Most consumers are moving towards strong beer (an alcohol content of close to 8 per cent). In 1999-2000, the total size of the beer industry was six million hectolitres: of this, the strong beer segment accounted for 3.6 million hectolitres. And while the strong beer segment is growing at the not-too-hot rate of 8 per cent, the mild beer one is shrinking at the rate of 20 per cent a year. Rues Mohnish Bali, 33, Director (Marketing), Shivalik Industries, the brewers of Stroh's in India: ''...something needs to be done in earnest to push milder beer brands aggressively.'' That may help. However, unlike consumers in the countries of provenance of these brands, people in India do not view beer as a drink with mild alcoholic content that is drunk when one is just hanging out with the crowd, grabbing a working lunch, or frittering away time on the beach on the weekend. In India, people drink beer to, well, get drunk. And given the value-conscious attitude of the Indian consumer-even when his, or her, mind is clouded by a surfeit of strong beer-a strategy like the one adopted by Miller to promote its extension Miller-lite won't work. Miller-lite, the company pointed out to consumers through a series of ads, was lighter, not weaker, which meant you could drink more of it than other beers. The future of these brands, then, looks flat. Hic calix! -Jaya Basu HOW TO COMPETE A guide to competition becomes cause for contention. The good news: India, finally, has a competition policy (135 pages long). Says S.V.S. Raghavan, 70, Chairman of the nine-member Commission on Competition: ''The competition policy is an instrument that will facilitate the efficient allocation of resources, technical progress, consumer welfare, and the regulation of the concentration of economic power.'' Whew! Put otherwise, the competition policy is a law (actually, a set of laws), that will foster free (and fair) trade, and curb, even eliminate, unfair trade practices. The yet to be set up Competition Commission of India won't be a toothless tiger either. Explains committee member S. Chakravarthy, 62: ''The commission will have the power to mete out deterrent punishment to those who violate its provisions.'' It isn't just complaints by one company against another that the CCI will investigate, it will also have the power to adjudicate in any altercation between companies and regulatory authorities (like the TRAI or the IRA). Not being comfortable at the thought of creating a super-regulator, NCAER Director-General Rakesh Mohan, who was part of the Commission on Competition, voiced his disagreement through a dissent note in which he wrote: ''I am apprehensive that an authority vested with such enormous discretionary power could easily function in such a way that it starts coming in the way of Indian entrepreneurship rather than promoting competition.'' The other bone of contention is the Commission's suggestion that it be pre-notified about all mergers and acquisitions where the combined assets of the merged entity exceeds a Rs 500 crore. Even if a M&A does not create such a company, the commission suggests that it be pre-notified if the company effecting the M&A belongs to a corporate group whose assets, post M&A will exceed Rs 2,000 crore. Strangely, the competition policies of some first-world countries do not have the pre-notification clause. The good that the Commission has sought to do by advocating the repeal of antiquated laws like the Industries (Development & Regulation) Act, which is redundant in an environment where the government is moving away from the business of business has, thus, been largely ignored in the fracas over the creation of yet another super-bureaucracy. What was it someone said about absolute power? -Ashish Gupta INDICES The ice may have thawed on Dalal Street. But not, apparently, for the Morgan Stanley Capital International (MSCI) India Index. The reconstituted MSCI India Index has 14 new stocks, of which eight belong to new-e companies. And 10 scrips have been booted out of the index. Says John Fildes, 42, Executive Director, MSCI Asia: ''The changes in the India Index were made to increase industry representation, and re-balance the weightage of companies.'' The criteria for doing this: selecting stocks until those that account for 60 per cent of each industry's market capitalisation are included in the index; picking only scrips with sufficient liquidity and free float; ensuring that there aren't cross-holdings among stocks in the index; and applying the full market capitalisation weightage to each stock. In keeping with this methodology, Wipro's weightage in the Index has been reduced from 1 to 0.3 due to its low free float. Strangely, most Ketan Parekh favourites-Global Telesystems, HFCL, DSQ Software, Silverline, and Zee Telefilms-find a place in the revamped index. That would, indirectly, help the cause of the newest bull on Dalal Street as FIIs (Foreign Institutional Investors), who use the MSCI India Index as a benchmark, are certain to allocate funds to these stocks. The Index is proprietary, and available only to institutional subscribers, but there are question marks over the selection of several stocks. QM1: Jaiprakash Industries represents the capital goods sector. QM2: Escorts represents the automobile sector. QM3: Essel Packaging finds a place in the new index although the packaging sector isn't exactly hot. Concurs Abhay Aima, 38, Head (Advisory), HDFC Bank: ''It is debatable whether the new scrips are really representative.'' Fine, the MSCI India Index is not for all, but, in the absence of transparency about its constitution, questions will be raised every time it tries a (re)balancing act. -Roshni Jayakar |
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