Thursday, July 31, 2008

Shakespeare needed marketing lessons

How much would you pay for a pair of shoes? $3,400? Don’t gasp. For that’s the amount a lot of people cough up for a pair of “Manolo Blahniks”. His clientele is devoted, addicted and madly in love with his creation. Kim Kassel, a former New York fashion publicist owns more than 100 pairs and finds it difficult to buy any other brand.

When Ikea, the world famous Swedish furniture retail store giant, opened its first store in Atlanta (USA), you could feel the passion, the excitement people felt. One guy went to the insane extent of pitching his tent seven days before the opening so that he could win the $4,000 gift card. Before the doors opened, there already was a long line of 2,000 customers behind him.

Harley Davidson has the most dedicated customers who also belong to its 8,86,000 strong Harley Owners Group. They meet annually and discuss and enjoy their Harleys.

When Krispy Kreme opens its new store anywhere, some camp outside it overnight, others line up for hours for the first bite of its soft sugary doughnuts.

For music lovers, nothing can beat the iPod. An Apple store is the hottest destination for youngsters, for its loaded with cool stuff. When Apple puts on its MacWorld expo, thousands flock to it and walk around as if in a trance, dazzled by the beautiful creations. If there is one company that has totally turned all business rules upside down and shown the world what innovation really means, it’s Apple. These are “cult-brands”, that have won for themselves near-fanatic followership. These brands have become cult brands because they are selling not just the product but a dream, an aspiration, a passion. So how are such brands created?

Crazily Enterprising and Obsessive

That’s the new definition of a CEO who can make cult brands. Unlike earlier norms of financial know-how being the most important requirement for attaining the top-most position in an organisation, today, it’s the knowledge of marketing, and an excellent grasp over brand building strategies that companies are looking for. You need the top guy to be one who understands the importance of investing in Brand building. Since this does not always show results in the short-run & hence requires a long-term commitment from the top, all those companies that did that, are today reaping rich dividends. When you build a brand, you build a unique identity that consumers love and respect. This differentiation helps the company survive in the long run.

“Our stores have become a gathering and meeting place in addition to the coffee,” says Howard Schultz – the CEO of Starbucks, “Starbucks represents something beyond a cup of coffee,” he adds. When people go to Starbucks, they go to not just to have a great cup of coffee [which can be easily copied by various competitors], but to enjoy its unique culture – which is the heart of the brand [no one has ever been able to copy the heart & soul of a company].

Apple is loaded with engineers. Not just engineers, but ones who have the passion to “emote,” whose eyes light up when they discuss the product features. After all, Jobs is no ordinary CEO and hence he doesn’t hire ordinary people. His genius and his obsession have given Apple its unique environment of innovation. Steve Jobs is so crazily involved with his inventions that he considers it futile to do market research or focus groups. For him, new product development starts in the gut and takes form with the help of talks & discussions with equally obsessive team mates. It’s no surprise that this year, Apple ranks the new No.1 among America’s Most Admired Companies. It also ranks No.1 among Fortune 500 companies for total returns to shareholders over past the five years (94%) and past ten years (51%).

The leader makes all the difference. He creates an environment in his organisation, which is just right for developing and nurturing cult-like brands. Pick up any cult-brand and you will find behind it very-well-taken care of employees. That’s the first thing the leader does to start brand building. No organisation can even survive, forget about excelling, in this tough market environment if its employees – its first customers – are not taken care of. The next step is to invest in intelligent marketing strategies.

It’s a whole new world

The customer of today is different from the one of yesteryears. Today’s customer knows how to avoid marketing efforts directed to him. He has a caller ID on his telephone to block unwanted calls, a spam and pop-up blocker on his internet. He even has a TiVo which records his favourite TV programmes, minus the advertisements. Traditional branding models using traditional media will no longer work. As someone once said, “How do you become a millionaire? Become a billionaire and then buy an airline!” Then someone modified it & said, “buy a newspaper!” With advertising revenues dwindling steadily, traditional media like newspapers, magazines are singing their swan song too, making brand building more challenging.

When Wieden+Kennedy created the “Just Do It” campaign for Nike, TV & print helped spread the magic of ‘swoosh’ the world over. Today, Nike is finding itself out-of-sync with its target consumers, for they’re now tuning into different forms of media. It’s more the digital and interactive ones that have got them hooked. Almost all top brands today have started spending less & less on advertising. McDonald’s has cut its TV ads from 80% to 50%. Samsung, unlike Sony advertises on TV, only during the last six months of the year when sales peak.

Like most cult brands, Ikea too spends very less money on advertising. They prefer to generate a word-of-mouth. Johnson & Johnson, which traditionally spent a lot on TV & print, changed its media spending pattern last year. Plain advertising is no longer working and marketers need to look beyond the comfort of 30-second TV spots. The new generation is, in fact, averse to “in-your-face-marketing” efforts. One needs to think of novel ways of reaching out to today’s customers. Digital and interactive media seem to be the playgrounds for marketers in the future. It’s no coincidence that when Nike decided to expand its list of advertising agencies, it was not looking for the big ones, but those with interactive, digital and community-building capabilities. It even partnered with Apple and created an offer “Nike+iPod”, which virtually transformed running. Detroit’s carmakers, the long time pillars of print advertising, are recklessly chopping their print advertising budgets to curtail costs. Today, to survive, everyone needs to change their marketing habits and find new ways to connect with consumers.

It’s Asia’s time now

There was a time when the Big 3 of Detroit were GM, Ford and Chrysler. Whoever thought that today they would be replaced with the likes of Toyota and Nissan all Asian brands. There’s a trend. Consumers are quickly shifting from European and American manufacturers to Asian ones. China has already become the manufacturing hub of the world. However, it’s no longer satisfied with just being the “low-cost-factory” of the world. Brands are built on perceptions and most Asian brands are viewed as cheap-mass-produced goods. That’s changing. China, Korea have realised the importance of branding. Good products, well made products, will never help you survive, but a strong brand and unwavering brand loyalty from customers can help defeat competition. Using the Olympic as a new driving force, a whole lot of Chinese brands are working hard towards improving their brand identities like Lenovo and Haier. South Korean brands like Samsung are fast becoming the favoured brands of the new generation.

It’s difficult to build brands. When Hyundai first started its US operations, it was mocked at by all & even featured in the “Worst Car Ever Made” lists. It lost no hope & worked consistently towards improving its image; and today, it’s the 6th largest automaker in the world & even features in the Best Global Brands survey by Interbrand.

Different brands survive in different cultures. The good news for most Asian brands is that a lot of western brands, even the big ones, have not been able to survive on the Asian turf. Yahoo & Google may be world leaders, but in China, it’s “Baidu” that controls 57% of the Chinese search market, which incidentally is the world’s second largest Internet market. On the Indian shores, Maruti still seems to be the favoured brand when it comes to cars. Amul is still the “taste of India”. If it is the blogger community that works best in USA, which believes that everyone has the right to an opinion, then those are celebrity endorsements that work best in Asian markets in building brands. Asian markets have their own idiosyncrasies and if marketers can understand that, they can start counting the moolah as the Asian consumer today is ready to buy brands and pay a premium. He is aware and loaded! We need to start thinking about building stronger brands and making their presence felt worldwide. We need to inculcate a new culture. We have big powerful businesses but they have no global standing. It’s time to invest in branding, even “corporate branding” for times are changing.

A laptop without the Apple logo would not feel so good (even if it was identical to Apple). Where’s the charm in wearing a denim if it doesn’t sport the Levi’s tag. Yes, life without brands is not the same. Nobody wants just a great quality product, but a Brand name too. Shakespeare said decades ago, “What’s in a name? A rose with any other name would smell just as sweet.” Maybe not today. Brands are becoming the deciding factors in buying decisions. Probably Shakespeare needed marketing lessons too!

Thursday, July 17, 2008

The humble handset

If you thought that your humble cell phone was just that, perish the thought. It is the global lifeline for cultural, economic and social change. From social change to social networking, everything is happening on the quintessential mobile phone

“A man, a young surfer, receives a call on his cell phone. A woman’s voice on the other side tells him that she has been kidnapped and her husband and son, along with her would be killed. She has no clue where she is. He is her only lifeline. The cell phone battery might go dead soon, so would her chances of survival.”

That’s a snippet from the very engrossing thriller movie Cellular. You need to watch it to know what finally happened to Jessica Martin (the woman who called) and whether the young man could rescue her by using his mobile and nothing else. But today mobiles are doing much stranger and fantastic things than just rescuing kidnapped women.

Changed economics

Ozwald Boateng is the famous British designer who is credited with introducing ‘tailored suits’ to a new generation. His suits are worn by the likes of Will Smith, Russell Crowe and Keanu Reeves, but his heart beats for Africa (where he was born). His organisation ‘Made in Africa’ is helping spur economic development in the region, and it’s the humble handset that’s helping him do that. Africans in rural areas rely on money sent by their family members working in towns and cities. With the absence of banks, many of them rely on bus drivers who promise to stop by at the worker’s village en route to their destination and give the money. UK based Monities is a company that has developed a technology that has turned the handset into a banking tool to help transfer money and it’s now as secure as a cash machine.

Today, rural areas may not have banks or cash machines or any basic infrastructure, but a whole lot of them have mobiles which is probably enough to bring about a change and create a significant impact on economic growth of the country. Mobile banking is revolutionising the world. What was once just a CSR (corporate social responsibility) project for banks, today is a fantastic business opportunity for many. According to a research by Vodafone, mobiles have a stronger positive impact on economic growth in developing countries, sometimes twice as large as in developed countries. A huge 62% of small businesses surveyed in South Africa and 59% in Egypt said they had increased profits as a result of mobile phones, in spite of an increase in call costs.

Mohammad Yunus changed the face of so many villages in Bangladesh with his micro-credit schemes. Now micro credit is being used by the poor women of these villages to buy mobile phones, which they then rent out to the other villagers who do not have a mobile of their own. Bangladesh’s Grameen Village Phone Programme, with more than two lakh women operators (also known as ‘phone ladies’) helped break their vicious circle of poverty. According to a 2005 United Nations manual, a typical village phone lady had an average income three times the national average.

Short message, long effect

If there is one technological innovation that has spread like wild fire, it is the cellphone service. You need a powerful idea and you can start a revolution literally. The SMS (short messaging service) can actually build you castles out of air. This wireless connection with people anytime, anywhere has been the most powerful development of our times.

According to the White Paper of Institute of Audiovisual & Telecoms in Europe called ‘Mobile 2008: Market & Trends’, half the world population owns a mobile phone. According to the report there were 3.18 billion mobile subscribers worldwide at the end of 2007, 70% of whom lived in developing countries. They have changed the way we communicate, talk and think. We no more write “Dear Vishal…; instead making do with a ‘c u @ 5’. We now chat more. According to anthropologists in UK, people are gossiping more freely which according to them “…is not a trivial pastime but part of our evolutionary hard-wiring.” It’s a therapeutic activity.

Mobile phones are today deciding how we handle our relationships. Flirting is easy (just send an SMS) and getting caught is easier. Not surprising that in France, mobile service providers were obliged to replace the last four digits of the ‘number dialed’ column in itemised bills with asterisks, after thousands of men protested that their affairs had been discovered. SMS has become so big (it’s after all faster and more convenient than email) that today it has emerged as a key revenue stream for most operators. According to a TRAI report, SMS grew by 109% in 2006. Revenues from messaging went up by 54% to Rs.1,300 crore in 2006 comprising about 5-6% of total telecom revenues. This is likely to increase manifold in future as everyone – from consumers to business people – is discovering the efficiency and cost effectiveness of an SMS.

Small retailers like kirana stores, pharmacies, et al, today send SMSs to their regular customers asking for home-delivery requirements. We now even have SMS services in Hindi called MeghDoot, enabling users to send Hindi SMSs using an English keypad. Auckland cinema management software company, Vista, has developed a system through which the cinema staff gets to process and receive payment for food and drink orders from customers in their seats, with the help of a mobile software. Soon Vista, a Mobile Cinema, will launch a software making movie tickets just an SMS-away. A first of its kind in the world, it would let movie goers view show timings and buy tickets on their mobiles.

With 130 million mobile phone users in sub-Saharan Africa and 1 million being added every week, a Dutch NGO is using the SMS to educate the people there and improve awareness about HIV/AIDS. This is motivating people to get tests done and seek treatment. This ‘Text for change’ is becoming very popular among young Africans. According to its founder, Bas Hoefman, “Cell phones have not been just about technology, they have brought about a cultural change in countries.” From social change to social networking, mobiles are doing everything. Big phone operators - like Vodafone - are investing in softwares that will help users manage their contacts with social networking features. Soon you’ll have no need to go to Facebook, just the phone book on your mobile would do.

Games people play

Yes, people play games – lots of games and according to some, the next generation games would not be played on your laptops or PCs but on your mobiles. 3D mobile gaming would soon be the most popular form of entertainment with high-end mobiles seeing an increase in both sales and usage. With the success of Hollywood blockbuster games like Star Wars, King Kong, et al; Bollywood too is quickly converting its ‘hit’ movies into mobile games. Rang De Basanti, Sarkar, among more, have been converted into mobile games, which is already a Rs.90 crore market in India, with Bollywood contributing Rs.10 crores. Not surprising that the super-ambitious Anil Ambani has also jumped onto the bandwagon, with his game publishing company Jump Games. They will now let you become a jet-ski champ with Bipasha Basu, or take yoga lessons from Swami Ramdev or learn about Deepak Chopra’s Kamasutra on your mobile. If that’s not enough, for your average ‘saas-bahu’ audience there’s even a tie-up with Rajshri Productions to convert hits like Maine Pyar Kiya into games.

Sholay started this trend. It became the most frequently downloaded game, crossing the 150,000 download mark. Seeing India’s craze for Bollywood, Paramount Digital Entertainment has also decided to enter the market, making Hollywood content available to Indian consumers on their mobiles. With mobile users increasing at a break-neck speed, revenues from mobile gaming are set to increase proportionally.

It is just by concentrating on mobile games that Keiko Erikawa today features in the Forbes billionaire list. What’s more impressive is the fact that she is the only self-made female on the list. Kudos to her and to mobile gaming.

Everybody is mobile

National Football League and the National Basketball League are now looking at mobiles as the new channel for reaching fans and advertisers. Fans can receive mobile video alerts of the game and highlights on their mobiles, another big opportunity for revenue generation. Not just sports stars, but even designers now feature a swanky mobile as a part of their portfolio! Be it Prada, Armani, Tag Heuer, they all are bringing out their best designs for the mobile. Rubies, emerald, diamonds have started draping phones. Once it used to be only Nokia’s Vertu that made highly expensive mobile phones. Today it’s the quintessential accessory of any well-heeled personality. On the flip side you also have a $10 phone by Hop-On. There’s a handset made from corn and not plastic by Samsung.

When Kejriwal borrowed Rs.5,000 from his friends to start his small company, he never knew his unique idea Mobile2Win would become a case study in Stanford University for wireless marketing. He was the first to start a TV-based SMS brand marketing. Be it advertising, gaming, brand building or earning big bucks; today everything seems to originate from the mobile. So, before you send your next SMS, take a closer look at that device in your hand. It’s not just a humble handset.

Thursday, July 3, 2008

Stop Winking in the Dark

Unless you’ve hooked the eyeballs of potential consumers, simply having a ‘winning’ product in your portfolio is never enough. Effective (and not necessarily expensive) advertising can package the product in the sexiest way possible, creating and fuelling demand for your offering...

David Ogilvy, the guru of advertising once said, “It has taken more than a hundred scientists two years to find out how to make the product in question; I have been given thirty days to create its personality and plan its launching. If I do my job well, I shall contribute as much as the hundred scientists to the success of this product.” In short, he wanted to tell, good advertising is very powerful. It is like the fairy godmother, who with a wave of her magic wand turned an ordinary pumpkin into a shining coach and the simple, dowdy Cinderella into a beautiful elegant girl.

Indeed, advertising does have the power to transform a product. It has the power to turn your product into a desirable brand. A good product without the backing of great advertising is a failure. Think of Marlboro and the first thought that comes to your mind is of a rugged, muscular cowboy on a horse, a cigarette in his mouth. Did you know Marlboro was first launched as a cigarette for women? The moment the advertising was changed, the very same product was transformed into an iconic brand. Lifebuoy soap was made from leftovers of all other soaps, nonetheless, it was its unique advertising and jingle ‘Lifebuoy hai jahan, tandurusti hai wahan’ that won it a large chunk of the market share. It became the ‘tough-soap’ for the man, who works hard and needs a strong soap to keep him clean and fresh. As Charles Revson, the man behind the very successful “Charlie Perfumes” once said, “In the factory we make cosmetics, in the drugstore we sell hope.” People don’t buy products, they buy a dream. They buy a hope and advertising creates those hopes. Ponds Age Miracle cream’s success is proof of this. It sells you the promise of rekindling a faded romance, the promise of a glowing skin that would have men falling head-over-heels for you.

Singapore Airlines was just another airline till Ian Batey of Bates Advertising invented the ‘Singapore Airlines Girl’. Unlike most state-owned entities, Singapore Airlines had a tough start – with no domestic routes to serve, it had to compete with international airlines from day one. The advertisements and the slogan: ‘Singapore Girl – You’re a great way to fly’, immediately gave the airline an aura of sophistication. It promised you a lovely flight and great service. In fact, the Singapore Girl became such a prominent figure that Madame Tussaud’s Museum in London started to display the Girl in 1994 as the first commercial figure ever. This in itself was great branding for Singapore Airlines! If it was the Singapore Girl who did wonders in Singapore, then closer home, it’s the Utterly-Butterly Delicious Amul Girl who has helped Amul butter successfully fight competition for so many years. The unique and topical advertising of Amul for all these years has kept the Indian consumer entertained and also very loyal to the brand.

India was a country where gold was considered to be the most precious of all. Not just was it important for weddings, but it was also seen as a great way to invest. In came DeBeers and through its intelligent and consistent advertising changed the outlook of a whole lot of Indians. Diamonds now started replacing gold. Through their advertisements ,they convinced Indians that “diamonds are forever”.

Effective! Not Expensive!

Consider this advertisement. “I never read the Economist” – Management Trainee, Age 42. This simple online poster changed the perceptions about The Economist forever. Once considered a boring, serious magazine in the 80s, it’s this and a series of billboard advertisements that repositioned the magazine. They did not allocate a huge advertising budget for it. All they did was put up posters twice a year – once in spring and then in autumn, two weeks each. So four weeks of poster advertising is all it took to increase its UK circulation by 25% in 10 years. Not just that, people actively waited for their hard-hitting but humorous, always to-the-point one liners.

Decades ago, David Ogilvy proved that you didn’t need a large advertising budget to make a mark. He was assigned to make advertisements for a new brand of shirts called ‘Hathway’. The competitor was Arrow shirts – a big brand with a bigger advertising budget. Ogilvy knew he had to get his brand noticed fast and he had limited space and time. He featured a model who looked arrogant, charismatic and sophisticated. But that was not enough. To differentiate him from the others, he made him wear an eye-patch. In a sea of very handsome and very forgettable models, the eye patch stood out. Sales skyrocketed from two million to 30 million. What an eye-opener!

Virtually Everything

Yes creativity – the big idea – is what is required to make your advertising and your brand stand out. However, creativity has a new playing field today. It’s the virtual world – the Internet. It has changed the world of marketing & advertising forever. Viral marketing seems to be the latest and sometimes the cheapest and most effective way to beat competition and create a buzz about your product.

The Blair Witch Project was a low budget movie made by a couple of American students. It became a big success thanks to the intelligent use of the internet which was used to promote the film months before its release. The movie was promoted with a viral as the story of three young filmmakers who get lost in the woods and disappear, while filming a documentary about the eponymous local legend. Neither the students nor their bodies were found. However the camera was left switched on and had recorded the mysterious witch. The recording was recovered several feet under a building foundation that was laid at least a century earlier. This unique style of promoting caught everyone’s fancy. The news about Blair witch sent the internet into a frenzy. Everyone was aching to see the accidental recording. People believed it to be true. The result: a profit of around $300 million for a film that cost less than $3 million to produce.

Dove soap came out with a viral-ad named ‘Evolution’. It showed how a simple face through make-up, special effects and proper lightening could be transformed into that of a supermodel. It went on to show how Dove stood for real women and real beauty. The film became a craze and was viewed more than 1.7 million times on YouTube, not to mention the immense coverage it got on myriad talk shows, newspapers and magazines. Time and again companies have been using viral marketing to create a buzz around their products. Through ‘hot linking’ a viral message at the bottom of every e-mail saying ‘sign up for your free Hotmail account’, Hotmail grew its subscriber base to over 12 million subscribers in 18 months – the fastest by a company in history!

Word-of-mouth seems to be the new media to advertise. Not surprising that we find a lot of companies actively involved in social-networking sites like Facebook and Orkut, attracting young consumers by befriending them. Capital Times, the daily newspaper of Madison, has become paperless, in that it’s available only on the web. Many more are going to go the same way. Circulation is falling, ad revenues are nose-diving, classified ads – once a profit centre – have lost out to web sites like Craigslist. The future is virtual.

Finally, an advertisement’s main jobs is not to be creative and interesting. Its final aim is to sell the product. It is ‘salesmanship-in-print’. As Ogilvy said “When I write an advertisement, I don’t want you to tell me that you find it creative. I want you to find it so interesting that you buy the product.” If that’s the goal in mind then advertising is a powerful tool to build a brand, help it beat competition and win market share. No company can be a leader without a strong commitment to advertising. As S.H. Britt said, “Doing business without advertising is like winking at a girl in the dark. You know what you are doing. But nobody else does.” So, get those creative juices flowing and dish out some great ads. Its time to stop winking in the dark.