The Looking Glass

The Looking Glass
a Pan IIM Initiative
Vol 2, November 2010
Dear Readers,
It gives us immense pleasure to bring out the second edition of the PAN-IIM marketing digest, with a joint effort by
the marketing clubs of IIMs A, B, C and L.
We would like to thank all those who were involved in taking the digest to the completion stage. There was a
tremendous amount of co-ordination and synchronization put in by the marketing clubs of the 4 IIMs. We are
especially thankful to the faculty who guided and encouraged us at various stages of development of this magazine.
Please do send us your feedback at [email protected]
Yours Truly,
Team Looking Glass
In this edition
Pan IIM Team
New Product Launch – Lessons From Microsoft Kin
Page 2
Kids’ Power - The Hallowed Art of Persuasion
Page 5
Indianizing - The Pepsico Way
Page 8
Advergaming:A Silver Bullet Or Just Another Arrow In The Quiver Page 10
Ayshwarya R. Vikram
IIMA
Saurab Nair
IIMA
Prabhakar PJ
IIMB
Tamanna Padhi
IIMB
Brijesh Unnithan
IIMC
The Brand is Not Enough
Page 14
The Tipping Point of Creativity
Page 16
Social Media Marketing: The Next Big Thing
Page 19
Pratik Prakash
IIMC
The Apple STOREy
Page 22
Pankaj Rawat
IIML
Ambush Marketing - Ethical or Unethical
Page 24
Vignesh Rajan
IIML
Tip-Tap-Toe: Classic or Arcade
Page 27
Pooja Pangtey
IIML
Cloud Marketing
Page 30
Quizzes
Page 9, 23
Identify the Personality
Page 4
The Looking Glass
NEW PRODUCT LAUNCH – LESSONS FROM
MICROSOFT KIN
Abstract
ABOUT THE
AUTHOR
Priya Narayanan is a 2nd
year PGP student at IIM
Ahmedabad. She holds a
Bachelor’s degree in
Electronics and
Communication
Engineering from GEC,
Thrissur and can be
reached at
[email protected]
What determines the success or
failure of a new product launch? Why
do even established, experienced
companies get it wrong? This article
looks at the launch and subsequent
withdrawal of Kin – Microsoft’s
smart phone-like device aimed at the
youth segment – all during a timespan of about two months from April
to June 2010. It aims to probe on the
reasons for the failure of this new
launch. Did the product not live up to
what it had promised? Was the
product proposition flawed? Did it
target the wrong audience? In
looking at these and other questions,
an attempt is made to pinpoint some
lessons for today’s companies as they
take up the challenge of launching a
new product.
New Product Launch –
Lessons from Microsoft Kin
“Microsoft Ushers in the Next
Generation of the Social Phone with
Kin, a New Windows Phone” – thus
went the headline of a Microsoft
press release on April 12, 2010. At
the time of its launch, Kin was touted
to be a landmark in “social phones”
and it targeted what analysts have
termed the “generation upload”. Yet,
within a span of two months,
Microsoft had to disband the entire
team involved in the development of
Kin and integrate them into its
Windows Phone 7 development
team.
While Microsoft deserves to be
lauded for quick action on a project
with severely limited scope of
commercial success, there are
several lessons in the Kin fiasco for
companies that wish to successfully
launch new products. The product
may be packed with features and it
may be promoted powerfully, but if it
does not answer the target segment’s
needs, then nothing (pricing,
packaging or plain-old advertising)
can sell it.
The Product
Microsoft’s Kin was proposed to be
“the ultimate social experience that
blends the phone, online services and
the PC” into one. Three “new”
features that Kin brought to the table
were Loop, Spot and Studio. Loop
was the home screen of the phone,
which stayed always up-to-date and
allowed the user to remain
constantly connected to online social
life. For this purpose, Loop
assembled feeds from Facebook,
Twitter, MySpace and other services.
Spot allowed users to share content
such as videos, photos and status
messages with anyone through a
simple drag and drop action. Studio
enabled the user to access all the
contents in the phone’s memory, for
instance photos, online through
cloud computing. It also provided
automatic online backup of all the
user content. Besides the three
elements, Kin included features of
Microsoft Zune which allowed users
to listen to and download music,
video, FM radio and podcasts.
Two versions of Kin were launched in
the U.S. – Kin-One aimed at singlehand use for $49.99, and Kin Two
which was a higher end version for
$99.99. The pricing of the data plan
by Verizon began at $29.99.
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The Looking Glass
Target Segment
Kin, according to the launch press release, was
targeted at “people who [were] actively navigating
their social lives.” It was positioned as a device that
would enable active users of social networking sites
such as Facebook and MySpace to share any aspect
of life they wished to.
A key point in the Kin proposition was that it
enabled young users to stay connected. This was
evident in advertisements that used taglines such as
“Friends, friends, friends” and followed a young
user’s set of friends. Kin also projected the image of
a fun device, rather than a product for professional
or business users, through advertisements featuring
videos of partying youngsters.
The Launch
Kin was made available online on May 6, 2010 and
at Verizon stores a week later. Sharp was the
handset manufacturer and Verizon Wireless was the
exclusive carrier in the U.S. It was initially launched
only in the U.S., and was planned for launch in
Europe in autumn by Vodafone.
However, sales were sluggish from the start and
within a short period of time, prices were slashed
drastically – Kin One was down to $29.99 and Kin
Two to $49.99. In spite of this, only about 500 units
were sold, before the decision was made to close
down the product rollout. Launch plans were
completely scrapped and the team behind Kin was
disbanded.
What Went Wrong
Kin’s abysmal failure in the market could be
ascribed to several reasons, most important of them
being product features, pricing and targeting.
Despite the presence of ingenious features, Kin
failed to include provisions for apps or third-party
applications, or even an application as basic as a
calendar. It also did not incorporate instant
messaging which could have been identified as a
critical application for the youth population being
targeted. Another mistake was to preclude support
for Flickr and YouTube in favour of Windows Live
services which were, whether Microsoft liked it or
not, less popular.
It was not just on technical aspects that Kin might
be deemed deficient. In terms of pricing, Kin was
pegged too high for a device that was less than a
smartphone but more than a conventional phone.
The data plan was priced at a level more suited
for a smartphone when Kin was, in many respects,
only a fancier feature phone. Taken together, this
meant that the price of Kin was beyond the
acceptable range for most of its presumed
customers.
Slashing prices on the face of non-existent sales
was merely an ineffectual gunshot in a battle that
was already lost. There was no way that this could
have worked as a promotional tactic.
Moreover, unlike what Microsoft would have
loved to believe, the target segment of Kin was not
there for the taking. Through its attributes and
pricing, Kin disregarded the needs of the target
segment. Also, Kin was competing against several
products in the same genre and related genres,
products spanning the entire spectrum from
feature phones to top-of-the-range smartphones.
The stage of market evolution was such that
comparison with existing products was inevitable.
The device simply was not good enough to
provoke switching or to attract new users with an
invitation to experiment.
Lessons on New Product Launch
Given the path it took, Kin could well be termed
the ‘Edsel’ of the mobile phone industry. And the
lessons to be learned from the Kin fiasco for
companies aiming at a successful new product
launch are not few in number.
Marketing
a
new
product
necessitates
understanding the needs of the target segment.
Kin failed not because the opportunity for it did
not exist among the youth segment, but because it
provided what was not really needed and left out
features considered indispensable. Affordability
among intended users was also overlooked. This
elucidates the importance of identifying the
attributes of the product that are critical for the
target segment. That Microsoft has not been able
to launch any hardware device successfully since
Xbox is a pointer to organisational factors that
contribute to successful new product launch.
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The Looking Glass
Stories doing the rounds point to internal discord
between teams working on Kin and Windows Phone
7, and to Kin being given less attention than it
deserved, leading to the launch of a half-baked idea.
The extent of truth in these rumours may be
debatable. Yet, for any new product launch, it is
essential that priorities are clear within the
organisation so that efforts are focussed in the right
direction.
In addition, co-ordination with suppliers and other
partners in the value chain is critical for new
product success. While it lies in the realm of
speculation, Kin might have seen better days if the
pricing of its data plan from Verizon had been
within the range of acceptability of a college going
student. Hence, it is important that partners of the
company do not distance the product from its target
segment.
Directly or indirectly, questions such as “what
business are we really in” that Theodore Levitt
asked in his landmark article ‘Marketing Myopia’
and ideas like core competence need to be factored
in. Microsoft’s core competence of selling software
to business customers is far removed from the idea
of selling phones to teenagers. While such
differences do not necessarily mean failure, they
require that the new product launch is done with
extra care.
Conclusion
Today, given the starkly low rate of successful new
product launches, companies use multi-functional
teams for ensuring that new products do not suffer
from either a “drop” error or a “go” error, so that
neither is an opportunity missed, nor does the
company incur unnecessary costs of launching a
product that is destined to fail. They use elaborate
new product processes and protocols, such as
modified versions of the ‘Stage-Gate Process’ set out
by Robert Cooper. Yet, in spite of all precautions,
new product launch is risky.
Companies in such circumstances would do well to
heed the market. Otherwise, as Ross Rubin of the
market research and analysis firm The NPD Group
commented on Kin, even a product aimed at letting
users stay connected to friends would earn “far too
few friends of any kind at the cash register.”
Identify the Personality
1. He was born on Nov 19, 1909 in Vienna,
Austria. He earned a doctorate in
international law in Germany and left
Germany in 1933 due to the rise of Nazism.
He taught at New York University as a
Professor of Management from 1950 to
1971. In 1971, he developed USA’s first
executive MBA program for working
professionals at Claremont Graduate
University. His writing focused on
management-related literature. He made
famous the terms ‘knowledge worker’ and
‘knowledge economy’. He continued to act
as a consultant to businesses and non-profit
organizations until his death in November
11, 2005 of natural causes at the age of 95.
2. Born December 18, 1955, he was educated
at La Martiniere Boys' College in Kolkata
and has a degree in commerce from
Calcutta University. He entered politics in
2000 and superseded Subramaniam Swamy
as the president of the Janata Party. His
hobbies include car and horse racing.
3. Born Dec 2, 1947, in Mangalore, he is an
alumnus of National Institute of Technology
Karnataka, Surathkal and IIM Ahmedabad.
In 1988, he joined the Asian Development
Bank, Manila in their Private Sector
Department and worked on projects in
China, India, Indonesia, Philippines,
Bangladesh and Vietnam. He is a recipient
of various honours including Businessman
of the year(2007) by Forbes and The
Economic Times Business Leader Award of
the Year, 2007.
Answers
1. Peter F Drucker; 2. Vijay Mallya; 3. K.V. Kamath
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The Looking Glass
KIDS’ POWER: THE HALLOWED ART OF
PERSUASION
Introduction
ABOUT THE
AUTHORS
Prasad Nayak is a 2nd
Year PGP student at IIM
Lucknow majoring in
Marketing and
Operations. He is an
Electronics and
Communications
Engineer from Sri
Jayachamarajendra
College of Engineering,
Mysore and can be
reached at
[email protected]
R Ravi Kumar is a 2nd
year PGP student in IIM
Lucknow specializing in
Marketing and Finance.
He is an Electrical
Engineer from VIT,
Tamil Nadu and can be
reached at
[email protected]
Vishnu Kumar Modi is a
2nd year PGP student at
IIM Lucknow majoring
in Marketing. He is a
Computer engineer from
IIIT Hyderabad and can
be reached at
[email protected]
James McNeal, the author of ‘Kids
Market – Myths and Realities’ wrote
this in the Economist on Nov 30,
2006, ‘children under 17 years of age
influenced almost 47% of American
household spending in 2005,
amounting to almost $700 billion’.
India already has 450 million
children below the age of 18 and it
adds another 8 million children every
year. It’s not just the rising numbers
but also their mindsets, approach,
thinking, preferences, likes and
dislikes that have undergone a sea
change over the last decade.
Trends in this group are aplenty,
some niche and some mass, but all
are important. The numbers and
these rapidly changing trends impact
everything from government policies
to
education
to
retail
to
entertainment to the environment.
The influence of children in their
parent’s purchase behaviour has
been discussed by many researchers.
But the impact of chsildren’s
influence in the Indian context is a
topic which has not been studied in
depth. Not much effort has been
made to find out as to what extent, if
any; children influence their parents’
purchasing behaviour in India and
what factors contribute towards this
influence.
This
has
exciting
consequences and already being
explored by marketers. Gone are the
days when children were targeted to
sell things like chocolates, ice-cream,
toys, etc. Today advertisers target
children for a wide range of products
and are increasingly becoming
convinced about the role children
play in purchasing decisions of the
family.
Some popular examples come to
mind, who can forget Maruti’s ‘Papa
ki karaan? Petrol Khatm hi nahi
hunda’ ad, Surf’s ‘Daag achche hain’,
McD’s Happy Meal, Maggi Noodles,
the list goes on....
Several authors have identified the
influence of a child during the three
stages of decision making:

searching
gathering

establishing and evaluating all
possible alternatives

making the final decision
or
information
Also it has been found that the
decision making process in a family is
complex because decision makers in
a family change according to

Product type

Attitudes to purchase decisionmaking roles in the family

Family composition, e.g. single
parent families, small and large
families
Recent studies conducted in New
Zealand and reported in the
European Journal of Marketing and
the Journal of Consumer Marketing
indicate that adolescents seem to
play a significant role in the final
stages of decision making and
suggest that further research ought
to re-consider the role of children in
family purchases at all stages of
decision making . Given the wide age
range of children, authors have
identified a group of children as
“Tweenagers”. These are the 8 to 12
year olds, a relatively under-explored
segment which has a strong influence
in parents’ purchasing decisions. So,
if you feel that tantrums are all that
kids can throw then you’re in for a
big surprise.
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The Looking Glass
Statistics clearly reveal that children tend to
influence about $130 billion worth of goods every
year and this number is progressing as fast as
Saina Nehwal’s meteoric rise in the world
badminton rankings!
What could be the reason behind this trend? The
attributable reasons could be many but the most
logical one of them is the fact that the
demographics have shifted towards Double
Income families. As two income families become
the norm, the decision maker within the family
unit is changing. Also, parents have less time for
children, and consequently tend to let them
influence purchase decisions in order to alleviate
some of their guilt. Furthermore, the pocketmonies are ever on the rise. Children also have
more money to spend for themselves. Add to this,
the increased exposure via mass and digital media
formats and the inescapable influence of peers,
the combination is quite lethal. It is no longer
possible to shy away from the truth that’s staring
right at you. As the old adage goes, “If you can’t
beat ‘em, Join ‘em.” This is what marketers are
trying to do, be it in terms of advertising,
merchandising, POPs, promotions et al.
There are a number of steps involved in
developing
an
effective
and
successful
communication and promotion campaign. The
first step obviously, is identification of target
audience. The target is associated with the
concept of ‘buying roles’ in the decision making
process. It is possible for a single person to play
multiple roles. Some of these roles are initiator,
influencer, decider, buyer and user. Children play
an important role in influencing and persuading
their parents and that explains marketers’
attraction towards them. The amount of influence
exerted by children varies by product category
and stage of the decision making process. For
some products, they are active initiators,
information seekers, and buyers; whereas for
others, they influence purchases made by their
parents. The purchasing act is governed by how
they have been socialized to act as consumers.
Family, peers, and media are key socializing
agents for children wherein family-specific
characteristics such as parental style, family’s Sex
Role Orientation (SRO), and patterns of
communication are essential instigators.
Curiosity gets the better of us
Quite intrigued by this topic, we decided to
pursue it on our own accord. We tried to find out
whether children have any influence on the
purchasing decisions of parents or not. If the
answer to the above question was yes, then we
would shift our focus to finding out the reasons
for the same i.e. the why, how and when
questions. We restricted the scope to identifying
the influence of children over the purchasing
decision of parents wherein the decision needs to
be made with regards to products which have
utility value for the entire family rather than
products meant for children alone. Hence, we
took into account the perception and responses of
parents who are the ‘influencees’ rather than
children who are the influencers. This in turn was
achieved through various surveying techniques.
Survey
Questions for the survey were designed keeping
in mind the respondents i.e. parents. The
questionnaire can be implicitly categorised into
three segments. The first segment tries to address
the demographics of the respondent and the third
segment tries to measure the involvement levels
of the purchaser while deciding to buy a
particular product.
The second segment was extremely important as
it addressed the core aspect of our study. Firstly,
it tries to identify whether children influence
parents’ purchasing decisions. If yes, then it tries
to find out
a. When and/or where the influence happened
i.e. Before or After making the purchase
decision and Before going to the Store or In
the Store
b. Whether the purchasing decision was
influenced by Child’s Awareness Level or
Emotional Blackmail / Avoiding Tantrums or
Out of Love for the child
c. If the responses indicated that the influence
was primarily because of the Child’s
awareness levels, then the survey tried to
measure the mode of media from where the
child gets his/her information and also
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The Looking Glass
whether Television is the form of media that
influences the child These two questions
were added with the intention of providing
some insights to marketers regarding the media
format they could choose to address this
segment.
While designing the Questionnaire, one major
roadblock was how to ask questions for different
products. This issue was resolved by identifying a
product basket wherein the products were
categorised based on the degree of involvement i.e.
High, Medium and Low involvement. This
categorisation was done based on Secondary
Research, Focussed Group Discussions and Primary
Research using an Involvement Questionnaire
alone. Totally 15 products were identified and
using the above mentioned techniques, the
products were assigned to the three categories.
A world full of hypothesis
Ever wondered, the number of hypotheses you
have formulated after coming to a B-School would
probably be more than the number of times you’d
have cursed Team India after another defeat from
the jaws of victory (pun intended). Anyway, coming
back to our dilemma while solving the ‘Kid Riddle’.
Little research had been done on the factors that
are responsible (like parents’ income group, child’s
awareness level, etc.) for the impact of children on
parents’ purchase decisions or the purchase phase
where the actual influence occurs.
We wanted to extend the traditional research
objective “Do children influence parents’
purchasing decisions” to include these factors as
well.
Going for the kill
We stumbled upon the following intriguing results
and wanted you all to become party to it. So, here
goes... Children Influence Parents’ purchasing
decisions but the influence is contingent upon:
Income Group
Children’s influence on parent’s purchasing
decision doesn’t depend on parent’s income group
while considering High, Medium or Low
Involvement products. The same effect was
observed in the Overall Product Basket. Children’s
influence on parent’s purchasing decision:
Phase of Purchase
doesn’t depend on the phase of purchase (i.e. PreStore phase or In-Store phase) while considering
High, Medium or Low Involvement products.
Child Awareness
Children’s influence on parent’s purchasing
decision doesn’t depend on the level of children’s
awareness while considering High, Medium or Low
Involvement products. It depends on the level of
children’s awareness when we consider the entire
product basket as a whole.
In the case of Child Awareness, the results for the
low, medium, high involvement product baskets
showed that children’s awareness levels had no
effect on the purchasing behaviour of parents. But
when the 3 baskets were combined, the results
were quite the opposite.
The hidden meaning
The results of our study can have far reaching
market implications. The outcome reveals that the
Influence is independent of the phase of purchase.
If one were to observe the trends closely then the
realization dawns that most of the campaigns
targeted at children, have been centred around the
Pre-purchase phase while the examples for the InStore Purchase stage are few and far between.
Furthermore, as the gradual shift happens from
Advertising towards Sales Promotion, this segment
is wide open for exploitation.
Moreover, the influence is independent of the
Income levels, so the segmentation needn’t be
done to split the target group based on this
parameter. With DIWKs ‘Double Income With Kids’
becoming a phenomenon and parents not having
enough time on their side, the growing importance
of kids can’t be underestimated. Marketers would
do well by taking a leaf out of the West and look for
ways to target kids. But what needs to be further
explored is whether the implementation should be
exactly as in the West or does a customization
need to happen while focussing on India and the
subsequent impact of such campaigns on the sales
for the firm. Last but definitely not the least, the
ethical ramifications of this strategy need to be
clearly understood before jumping into this sea of
opportunities.
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The Looking Glass
INDIANIZING – THE PEPSICO WAY
Introduction
ABOUT THE
AUTHORS
Sachit Handa is a 1st year
PGP student at IIM
Calcutta. He holds a
Bachelors degree in
Electronics and
Communications
Engineering from
National Institute of
Technology Bhopal and
can be reached at
[email protected]
l.ac.in
When it comes to the taste buds,
Indians will be Indians...we love our
food and we love spicing things up.
Be it pizzas from the Pizza Huts or be
it burgers from the McDonalds, an
Indian touch before it goes into the
menu helps. I wonder what the
Italians would say to a ‘Keema Do
Pyaza Pizza’ of Dominos , or a
‘Teekha Paneer Makhani Pizza’ of
Pizza Hut. Ever gave it a thought why
McDonald’s is selling a burger named
‘Mc Aloo Tikki’ , or what a ‘Veg
Samosa’ is doing in a CCD display
window? The answer lies in one
word - ‘ Indianizing ’.
‘Indianizing’ isn’t a new or an
innovative concept, nor is it a word
you will find in the Oxfords or the
Websters. It is just a manifestation of
the most basic marketing principle
which tells marketers to revolve
every strategy around the consumer.
Look no further to see how this
works…the colorful assortment of
wafer and salty snacks on the display
rack of your closest general store are
perfect examples of Indianizing. The
market for these salty treats in India
is worth around Rs 2000 crore today
and is growing at a tremendous rate
of 20%. Of the big players , Pepsico
enjoys a large chunk of the market
share and has been very successful
with its indigenous products. The
success of this segment lies in the
aggressive ‘Indianizing’ strategies
employed by Pepsico .The focus here
is on the crunchy, spicy snack well
known now in every Indian
household- Kurkure. A 700 crore
brand in India which displayed a
double digit growth at the beginning
of 2010, Kurkure is one of Pepsico’s
products which is reaping the
benefits of successfully conforming to
the Indian tastes and sentiments. Let
us see how Kurkure captured the
Indian pulse and continues to do so.
The whole idea behind the product
was to fill in a category of salty snacks
which an average Indian loves with his
tea. Pepsico’s Lehar namkeens have
been there for a long time, but these
did not match the pick-off-the-rack
products like wafers and chips.
Kurkure filled this void and it was a
success as soon as it was launched in
1999. But Pepsico just didn’t halt
there. With now the knowledge that
Indianizing products is an asset,
Pepsico launched many flavors of
Kurkure which conformed with Indian
tastes. With meticulous positioning
and targeting, Kurkure has launched
flavors catering to local tastes like
‘Funjabi Kadhai Masala’, ‘Mumbai
Chatpata Snack’, ‘Green Chutney
Rajasthani Style’ ‘East Parar Tok Jhal’,
‘South Special’ and
‘Hyderabadi
Hungama’. The advertising campaign
also struck an Indian chord with
actress Juhi Chawla promoting the fun
loving family concept, something
which all Indians associate themselves
to. Attempts have also been made to
evolve Indian spicy snack recipes with
Kurkure as the main ingredient.
Kurkure has even been pilot tested as
a chaat at some malls where chefs
were encouraged to create new snacks
using Kurkure. And with the launch of
‘Desi Beats’ in 2009, the intent was
clear with the name of the product
itself. Kurkure also tried to enter into
the gift pack segment, another
‘Indianizing’ concept, where salty
snacks were portrayed as gifts to
replace traditional sweets during the
Diwali season. It didn’t catch on too
well, for the obvious reason that it
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The Looking Glass
attempted to meddle with a tradition core to
Indians in a cultural and religious aspect.
Moreover, the punch line ‘Muh Kurkure karo’ , a
rip off of the beter known ‘Muh mitha karo’ failed
to produce the desired impact. However, in spite
of a few hitches, including the rumor that Kurkure
had harmful plastic in it, Kurkure has emerged as
a brand which is now going to hit global markets
owing to its great response in India. "There has
been interest in the Pepsi eco-system for local
variants of Kurkure from South Africa to the
United Kingdom," says Gautham Mukkavilli ,
CEO—India Foods and President—India region
for PepsiCo. A consumer centric approach to
marketing can be notched up a level higher if the
local culture and tastes are finely understood.
Pepsico has proved this with its success in the
snack market. With one Indianized product doing
well in the market, it would be worthwhile to
watch how Pepsico’s Nimbooz would fare in the
long run – a product based on Nimbu Paani India’s favorite homemade drink.
Brand Trivia!!
McDonalds
• The northernmost McDonald's restaurant is
located on the Arctic Circle in Rovaniemi,
Finland, while the southernmost franchise is
located in Invercargill, New Zealand. Also,
the world's easternmost McDonald's is
located in New Zealand, in the city of
Gisborne; the westernmost restaurant is in
Western Samoa, as they are the closest to
either side of the International Date Line
Lamborghini
• Lamborghini is the name of the founder
Ferruccio Lamborghini. The bull symbol on
the cars is actually his birth sign.
• Lamborghini was actually a Tractor
manufacturing company and manufactured
tractors for decades. The first car they built
was in 1963 with top speed of 280km/h.
• Lamborghini can actually go 60 mph in
reverse.
Quiz 1
1. What business was Nokia into when it
started?
2. Expand BPL.
3. Identify the company
4. Which clothes brand gets its name from the
Wild West term for a cow hand who rustles
up stray cattle?
5. The Delhi-Bangalore Rajdhani is the first of
the three Rajdhanis to be branded; featuring
a host of additional passenger amenities,
including round-the-clock housekeeping
operations. Who is the advertiser?
6. Which brand had the tagline “Satyam
Shivam Sundaram?
7. The Parker company made a colossal
mistake when they tried to market their leak
proof pens. Instead of advertising 'It won't
leak in your pocket and embarrass you', they
accidentally claimed that 'It won't leak in
your pocket and make you pregnant'. In
what language was this mistake made?
8. Expand WIPRO.
9. In October 2003 Motorola decided to spin off
its semiconductor products business into a
separate company. What is the company
known as
10. Which brand has the tagline “Makes life a
little easier”?
Page 9
The Looking Glass
ADVERGAMING:A ‘SILVER BULLET’ OR JUST
ANOTHER ‘ARROW IN THE QUIVER’
Abstract
ABOUT THE
AUTHORS
Rohit Agarwal is a 2nd
Year PGP student at IIM
Bangalore specializing in
Finance. He is an
Electronics Engineer from
RVCE Bangalore and can
be reached at
[email protected]
Rohit Rakesh is a 2nd Year
PGP student at IIM
Bangalore. He is an
Electrical Engineer from
MNNIT, Allahabad and can
be reached at
[email protected]
Vivek Chakrapani Goyal is
a 2nd year PGP student at
IIM Bangalore. He holds a
B.Tech.in Information &
Communication
Technology from DAIICT, Gujarat. He can be
reached at
[email protected]
m
As Leo Burnett puts it, “A good basic
selling
idea,
involvement
and
relevancy, of course, are as important
as ever, but in the advertising din of
today, unless you make yourself
noticed and believed, you ain't got
nothing”.
Of late, gaining customers’ attention
has become one of the biggest
challenges for the marketers.
Advergaming has gained tremendous
popularity owing to its ability to gain
customers’ attention and also enable
a high degree of brand salience. In
this article we study the unique
characteristics of Advergames, its
applicability to various product
categories, and measures required to
enhance its effectiveness.
and also increase promotion by
building word of mouth via codified
buzz marketing.
Evolution
Advergaming was pioneered in 1995
by Skyworks1. Skyworks created a
free online gaming site for its client
LifeSavers of Nabisco. The site gets
millions of users every month. Since
then Skyworks has also created
Advergames for large corporations
such as AOL, Ford, ESPN, and Pepsi.
Other major players in the
Advergaming market are Zapak.com,
Games2win,
Indiagames.com,
Contests2win.com, Jump Games,
Hungama Mobile and Kreeda Games,
Zynga (Farmville fame).
Tell these numbers to any Brand
Manager and you’ve made his day.
Welcome
to
the
world
of
Advergaming.
Recent study by Robert Kent has
shown that 20 to 30 per cent of the
TV advertisements shown per hour
per network were from the same
product category1. This reduces the
effectiveness of advertisements both
due to the high level of clutter in
general & also due to the proximity of
advertisements from the same
product category (soap ad followed
by another soap ad). All the
traditional mass media advertising
suffer from this serious drawback.
The practice of using video games to
advertise a product by designing the
game around the brand or without it,
in an effort to enhance its brand
salience, is known as Advergaming1.
Advergames allow customers to
virtually touch, feel and experience
the brand by promoting repeat traffic
to the websites of the brands. The
importance of Advergaming to the
marketers is immense as they enable
marketers to collect invaluable
customer data via registrations
Advergaming is a unique medium as
it ensures that the interaction
between the consumer and the
products is both fun and engaging.
Moreover,
Advergames
lend
themselves naturally to peer-to-peer
marketing. Research has shown that
50% of the consumers who play the
Advergames do so for around 30
minutes1, which is considerable
more than the 30 seconds attention
span that most brands get on a
television advertisement, not to
‘The recall rate of Microsoft’s ads was
71 percent, and according to the
company, 60 percent of the gamers it
spoke with said they had a more
positive opinion of Bing after seeing
the brand in a game’1.
Page 10
The Looking Glass
Industry Classification
From its older system of classification which
included ‘above the line’, ‘below the line’ and
‘through the line’ methods, Advergaming offers the
following classification1 (as per Sneakygames1, a
leading game studio in Austin, TX with over 7
years in this industry):
• Sponsored Advergaming: The type of games
which are promoted and funded by a brand
but the brand itself doesn’t figure during the
game, either physically or in terms of gaming
experience. But the game ‘may’ feature on the
company’s website or could even be hosted on
third party website.
• Integrated Brand Advergame: The brand
appears during the game but is not
inseparably linked to it. It could be subliminal
or supraliminal
• Playable Brand Advergame: There is a great
deal of prominence given to the brand during
an Advergame, and it could in some way also
be linked to the experience of the game.
• Brandistraction [‘bran-distraction’]: Here
we find the closest association of the brand
and the game. There are two fundamental
laws, as Sneakygames point out:
• The game and the brand are inseparably
linked. For instance you could have a
Deodrant game where women are being
shot and the darts/bullets are the brand
fragrance bottle.
Classification-Involvement Map
Brand Involvement
mention at much lower costs. Moreover unlike
television advertisements which can be either
zipped or zapped, Advergames are more effective
in involving the customers owing to the addictive
and engaging nature of the games.
Sponsored
Advergaming
Integrated Brand
Advergame
Playable Brand
Advergame
Brandistraction
Advergame Classification
Advergaming For Different Product
Categories
Advergames allow for extreme customization for
different companies and products. To understand
how Advergames work under different
advertising situations, we would use the RossiterPercy grid to analyze the requirements of
Advergames for brand promotion under different
advertising situations.
Low involvement informational situation
Under low involvement situations, the consumer
does not have deeply considered attitudes
towards the brand. Therefore the Advergames
designed for such products should focus on either
one or two key benefits with the intention of
provoking a trial purchase or to use a problemsolution format. One such Advergame is shown
below where a simple tennis game resonates the
key benefits offered by Gillette Mach3.
• The player has to act and play in the same
vein and the same philosophy as
communicated by the brand, in order to
emerge a winner.
Page 11
The Looking Glass
High involvement informational situation
High involvement transformational situation
In high involvement situations, the consumers seek
more hard information and therefore the
Advergames focus on making logical and
convincing brand claims. The format of the
Advergames in High Involvement, informational
situations could either be comparative or
refutational in nature. One such Advergame is
shown below where MNS, a political organization
lays its agenda & disseminates information about
its activities.
In High Involvement, transformational situations;
the Advergames have to be liked and also need to
create a feeling of lifestyle identification with the
consumer. The Advergames also need to provide
supportive hard information to support the brand
claims. One such example is shown below where
‘3 idiots’ star Aamir Khan doles out advice and
words of encouragement, which participants
identify with the theme of the movie.
Low involvement transformational situation
Advergames
in
the
low-involvement,
transformation situations need to have a unique
and authentic emotional benefit to be effective.
Unlike the informational Advergames that need not
be likeable, low involvement transformational
advertisements depend on likeability of the ad as it
directly increases effectiveness of the game
message. One such Advergame is shown where
‘Axe Meter’ is used to determine participants’
attractiveness quotient and appeals to the hedonic
expectations of its TG male audience.
Other Factors That Influence The
Effectiveness Of Advergames
Difficulty level
Advergames are created in such a way that the
consumers are unlikely to master it in the first
attempt. It takes approximately three attempts
before a user can crack the game. As Advergames
are built around the theme of the product, this
leads to a repeated exposure to the product’s
theme; thereby resulting in a higher amount of
learning for the consumer.
Distraction
As Advergames are designed around the theme of
the brand, it is assumed that the consumer is
involved in the game. A higher level of
involvement from the consumer would increase
the learning by building on the associations
between the brand and the theme. However it
must be noted that the creativity used to create
the advertisement should not distract the
consumer from the product itself (the traditional
‘figure and ground problem’ in consumer
perception).
Page 12
The Looking Glass
Repetition
ASI Market Research Inc.1 has shown that the extent
to which the viewers link the ad to the brand name
is dependent on how early and how often the brand
name is mentioned. Therefore the Advergames
should ensure that the viewers’ first exposure to the
brand name is early in the game and also that the
viewer encounters the brand name on a frequent
basis while playing the game. However this needs to
be taken care of with caution, as an over-exposure
might lead to perceptual blocking.
Opportunities
• Durability
of
the game
• Unlike
mass
media,
can’t
span entire TG.
• Worldwide
Internet
penetration1 of
only 26%
• Degree
of
difficulty of the
game
• Sensible users
could see a
disconnect
between game
&
brand
12
identity
Threats
• Low costs of
creation
• Authentic to the
mission of the
company
• TG audience are
thought leaders
• Ease
of
mapping ability
to
user
demographics
• Helps meet a
very targeted
portion of TG
• Viral Effects1
• No Multitasking
Weaknesses
Strengths1
SWOT Analysis
on to other games which are a little more
challenging and probably more engaging. Also at
the on to other games which are a lit same time,
the game cannot be made too difficult, both in
terms of its rules and also the playing acumen, or
else the user shall have to use too many cognitive
faculties and the interest might wane away again.
Addressing the sensible user problem, we need to
ensure that product placement is well thought out
and based on user-profile and survey feedback. At
the same time, the theme and the message
inherent in the game should be perfectly aligned
with the brand’s identity that it has created for
itself over the years.
Advergaming:
Holds?
What
The
Future
Research has shown that online marketing is
more effective in driving purchase intent as
compared to other marketing media (Refer Figure
below). This is one of the biggest reasons behind
the popularity that Advergames enjoy with
response marketers. The size of the Advergaming
market in 2004 was $ 83.6 million and its size in
2010 is estimated to be around $ 3 Billion1, a
testimony to its acceptance and its growing
popularity, which can also be gauged by the fact
that the size of the Advergaming market by 2012
is estimated to be $ 68 Billion1 in US alone.
Action Plan For Effectiveness Of This
Medium Of Advertising
A clear focus on leveraging the strengths and new
opportunities while steering clear of its weaknesses
and minimizing the threats would be an ideal
strategy for any promotion. In Advergaming, the
strengths and opportunities are tangible and arrive
without much effort in form of increased user
involvement and brand awareness benefits, but it is
the threats that the organization should be wary of
and should be most eager to avoid. In order to
explain, let’s take in-game Advergames as a
reference. Advergames by their very nature are easy
to learn and even winnable in a short number of
tries. Needless to say, an overly easy game would let
the consumer interest wane as he could easily move
Source: Bain & Company/IAB Marketer Research1
Page 13
The Looking Glass
THE BRAND IS NOT ENOUGH
"I am irresistible, I say, as I put on my
designer fragrance. I am a merchant
banker, I say, as I climb out of my
BMW. I am a juvenile lout, I say, as I
pour an extra strong lager, I am
handsome, I say, as I put on my Levi
jeans" –John Kay
ABOUT THE
AUTHOR
Kiran Shah is a 2nd Year
PGP student at IIM
Lucknow and specializing
in Marketing and
Finance. He is an
Electronics Engineer
from DJ Sanghvi College
of Engineering and can
be reached at
[email protected]
Many marketers believe brands are
important because they shape
customer decisions and, ultimately,
create economic value. Brands are
the driving force behind persuading a
consumer to choose one product
over another. In an environment
where meaningful product and
service differentiation is becoming
increasingly difficult to achieve and
sustain, it also gives power to shift
market shares. Once upon a prebranding time, sneakers were just
sneakers: cheap, all-purpose canvas.
The buyer only decided whether to
go for high tops or low tops. Then
along came Adidas, Nike, Puma, and
Reebok and they started making
shoes mainly for running, and
followed them with whole ranges of
single-purpose sneakers: sneakers
for basketball, for tennis, and so on.
And the rest is folklore in shoe
branding. However, there are
companies taking this concept of
branding to a whole new level. They
are ever pushing the limits to which
they can leverage their brand to
increase market share, consumer
loyalty, etc. Welcome, ladies and
gentlemen, to the world of Power
Brands. Sample this – Coca Cola
values its brand at over $68.73
billion, IBM at $60.21 billion. The
world’s top 100 brands have a
combined value of $1.15 trillion. It is
natural then, that many CEOs aspire
to possess stronger brands.
But what does a Coca- Cola or an IBM
has that a State Farm or a Bell
Atlantic does not? So why not aim
high? In branding, aiming high is
rarely enough. Relatively few
companies establish true power
brands. Yet it is possible to create
substantial shareholder value by
prudent investment in brand
building, just as it is possible to have
a great career in business without
being a CEO, or create political
impact without being a governor.
In a world where strategic vision and
Page 14
The Looking Glass
the investments to support it - can go so awry,
companies should pause before they invest to
consider whether a power brand is truly within
their reach. More specifically, companies should
observe three principles in managing brands.
extensions of these brands across multiple
concepts and into multiple channels.
There are brands and there are Power
Brands
Building a power brand is a difficult challenge, but
the direct translation of brand equity into
shareholder value makes it a rewarding one.
Companies in industries that have not historically
used brands to build value should put brand
building on their management agenda. They
should not, however, get lost in the challenge. All
the while they are putting intelligent energy into
conveying an emotionally engaging message,
companies must not forget that their core product
assets – proprietary technologies in the case of
computer manufacturers, say, or investment
expertise in the case of mutual fund providers –
will continue to be a source of functional
superiority over branded competitors. It is, after
all, differentiation of this sort that built their
brands in the first place.
First, brand building is a considered process that
entails making the right investments at the right
time. Second, what those investments are and when
they should be made will be partly determined by
industry forces. Third, whichever the industry,
brand building calls for major marketing muscle. A
name becomes a brand when consumers associate it
with a set of tangible or intangible benefits that they
obtain from the product or service. As this
association grows stronger, consumers’ loyalty and
willingness to pay a price premium increases.
Hence, there is equity in the brand name. A brand
without equity is not a brand. To build brand equity,
a company needs to do two things: First, distinguish
its product from others in the market; second, align
what it says about its brand in advertising and
marketing with what it actually delivers.
Relationship then develops between the brand and
the customer – a relationship arising from the
customer’s entire experience of the brand. As the
alignment grows stronger, so does the brand.
Question: What is common between Coca-Cola, Nike,
Levi’s, Disney, IBM, Mercedes, BMW, McDonald’s,
Sony, Xerox that other brands don’t have? Answer:
All of the brand basics - a distinctive product,
between
consistent
delivery,
alignment
communications and delivery – plus personality and
presence.
Personality: Most brands have a purely functional
relationship with their customers: they are valued
for their consistent delivery of a product or service
that reliably performs a certain job. A Power brand,
however, creates a more emotional bond that grows
out of its personality. It generates relationships with
customers that are manifold stronger than those
achieved by ordinary brands.
Presence: Power brands seem to be present at
every turn, reinforcing their distinctiveness. Such
presence usually derives from national or
international scale. It also comes from successful
If you got the muscle, flaunt it
There probably isn’t any company that has built
and sustained a strong brand without strong
marketing capabilities. A company may start from
level 0 when it starts to build its brand strategy.
Its brand management department will not
necessarily look like that of a Unilever. In every
case, however, the company has critical marketing
skills to a high degree: a superior insight into
customer needs; the ability to devise products or
services that powerfully meet those needs; the
ability to redefine its offering as those needs
change; and the creativity to produce exciting and
compelling advertising. Without a strategic
marketing mindset that understands all of these
things, there is a risk that a brand will fail to
appear distinctive in the marketplace. Moreover,
differentiation must be communicated in a way
that customers understand and that motivates
them; otherwise the brand will not tap into the
virtuous cycle that is created when a customer
receives distinct benefits that are communicated
continually.
“And I'm not an actress. I don't think I am an
actress. I think I've created a brand and a business.”
– Pamela Anderson”
Page 15
The Looking Glass
THE TIPPING POINT OF CREATIVITY
Abstract
ABOUT THE
AUTHORS
Chinmaya Kumar Sharma
is a 2nd year PGP
student at IIM
Bangalore. He holds a
Bachelor’s degree in
Aerospace Engineering
from IIT Kharagpur and
can be reached at
chinmaya.sharma09@iimb.
ernet.in
Kunal Deep Bhagat is a
2nd year PGP student at
IIM Bangalore. He holds
a Bachelor’s degree in
Electronics and
Communications
Engineering from VIT
and can be reached at
[email protected]
t.in
S Archana is a 2nd year
PGP student at IIM
Bangalore. She holds a
Bachelor’s degree in
Electronics and
Communications
Engineering from VIT
and can be reached at
[email protected]
This article explains and explores a
phenomenon that is strangely unique
but largely inexplicable. Sometimes
an entire industry chooses to become
creative
in
its
marketing
communication. What is it that drives
all players to innovate with their
communication and not with other
equally pressing aspects of business?
Can one, looking into the future,
predict with any semblance of
accuracy, when this can happen to an
industry? These are the questions,
admittedly convoluted, that this
article seeks to answer. We identify,
in hindsight, instances when this has
happened, analyze and learn from
the examples, and then theorize what
may bring about this sudden
onslaught of creativity in an industry.
Introduction
The next time you see Idea’s ‘Oongli
Cricket’ ad or ‘Save paper’ initiative
and find it more creative than bland,
think back to its competitors - are
they treading the creative path too?
While Vodafone’s ZooZoo has
redefined advertising, Virgin, right
from its inception, communicated
through a perfect brew of wackiness
and wit to capture the mind share of
the youth. Aircel too is finding its foot
faster than one would expect, an
instance being the raft it simply
suspended from its hoarding (saying
“In case of emergency CUT ROPE”)1
helping rain-stranded Mumbaikars
find their way back home and
enabling itself find its way into media
stories galore.
Tata Docomo
surprised the market with its
creative schemes and instantly
catchy tune. The point we are
hinting at is that the entire
telecom industry in India seems to
have reached a tipping point which
Gladwell defines as the “levels at
which the momentum for change
becomes unstoppable."1 Beyond this,
all the players in the Telecom industry
seem to display a compulsive need to
get creative thus triggering a viruslike spread of creativity leading to
what may be termed as a collective
marketing ‘creative-isation’ or simply
a creativity epidemic.
Fooled
by
Perhaps not!
randomness?
Is the Collective creative-isation in the
Telecom
industry
a
sheer
coincidence? A random phenomenon
that can strike any industry anytime?
Through a set of comprehensive
examples, we rationalized the factors,
a combination of two or more of
which can lead any industry towards
this phenomenon. The identified
factors and the illustrative examples
are enlisted thus proving the
phenomenon transcends randomness:
Product Miniaturization/Relegation
When an industry becomes so
competitive that the products sold by
one
player
can
hardly
be
differentiated from that sold by
another, the product takes the ‘back
seat’, thus becoming the less
important
variable
in
the
Page 10
communication to consumers. In this
scenario, where the product has
become so miniaturized players feel a
need
to
create
an
artificial
‘differentiation’ often manifested
through creative communication. The
Indian telecom players are a case in
point. Although a high involvement
service, the dozen odd brands in the
market, with nearly similar offerings
Page 16
The Looking Glass
today have left the customer embroiled them into a
dilemma of which brand to pick! This customer
fatigue drives customers’ expectations way beyond
just the service offering. With the miniscule call
rates similar across the board and the same
services1 (like cricket, stock updates, welcome tunes
etc) being offered by one and all, it is the raft that
Aircel used helped sail into the clogged mindspace
of consumers.
The Eureka factor
Changing consumer psyche often call for drastic
changes in the tone and essence of communication,
which marketers need to quickly identify and adapt
to.
However
marketers
design
their
communications centered about presumed key
benefits which consumers derive from the product,
as perceived by them. These soon become mundane
norms which the entire industry follows until a foresighted, blue-eyed marketer radically alters the focal
point of advertising based on his discovery of the
real underlying benefit for the consumer. We define
this discovery as the ‘Eureka factor’ which catches
the true pulse of the audience and makes the
discoverer a game changer. There are instances to
exemplify as to how this tips off collection creativeisation.
Life Insurance being a high involvement product
with considerable negativity associated, the
marketers earlier resorted to leveraging the fearfactor.1 They appealed to a person’s innate dislike
for ageing and added to it a tinge of portrayed
helplessness and senility to give it the desired
proportions of fear. Humor was a taboo for they
feared being facetious until one rebellious ad-maker
adopted the Seat belt logic – the art of using humour
as a means to convey a rather serious message,
especially deployed when the product or concept is
perceived to have profound implications despite the
humour. Consumer’s growing impatience for
didactic ads saw the paradigm shift from factual to
funny advertising in turn spurring creativity in the
delivery of humor.
Nationwide Insurance dramatized premature ageing
through its “Life comes at you” ads in a manner that
not only evoked laughter but also set you thinking.
With its “Karo zyaada ka iraada” campaign, Max
Newyork Life insurance elegantly portrayed the
endless loop of our needs (Fig. 1) – a bald middleaged man might have everything that others yearn
for, but still yearns for that disappearing patch of
filamentous cells atop. Metlife Insurance, which
stands for “Peace of mind. Guranteed” smartly hints at
the uncertainty in life through the simple prank of a
kid securing pocket money from his granny in the
‘Aaa aaa aaja’ ad. This served as a tipping point for
creativity in Insurance advertising, with each player
vying for and scheming over the elusive last laugh,
quite literally!
Fig 1. A still from the Max New York Life Insurance ad
Another classic example is that of the Deodorant
industry in India. Earlier ‘Freshness’ was used as the
selling point, effectively coupled with fragrance, longlasting, antiperspirant attributes with the tone of
portrayal being direct or at best suffused in subtle
humour. However, the true value derived by the
customer drastically evolved from one of obvious
pleasant smell to a not so obvious sex appeal or ‘being
attractive’. This has been cleverly understood by the
ad makers as seen by the shift in their depiction from
freshness to sexuality. This change spurred by one
foresighted player has led the entire industry to join
the band wagon, each in their own creative way.
Product Maturity
Mature products (with respect to their product life
cycle) are also prime suspects that tend to bring out
the creativity of their sellers. The answer is perhaps
more intuitive than academic. By the time the
maturity stage strikes, most practicable changes and
variations have perhaps all been done to the product
already.
Consider the confectionery industry in India. These
being low involvement items, typically picked up at
the cash counter oftentimes as a substitute for coins,
sellers realized the need to make their brand sticky’
enough. Chlormint with its “dobara mat poochna” has
left a lasting imprint on the television space. However,
let’s wait here and think back to Center Shock ads.
Page 17
The Looking Glass
Vividly weird, remember? And Mentos?1 If it really
does what it claims it does (“dimaag ki batti jala
de”), then we are sure its ad-makers are always high
on a dozen or so Mentos themselves, so smart are its
ads. The Center Fresh (“zubaan pe lagaam lagaye”
and Center Fruit (“kaise zabaan laplapaiyee”) genre
has also deservedly collected its share of rave
reviews. And of course, the Happy Dent ads (Fig. 2)
where shining teeth substitute for lights has ended
up lighting innumerable advertising awards
functions, again expectedly enough. The learning is,
when you cannot get any more creative with the
product, you look towards the communication!
Fig. 3: The Creativity Matrix
Definitely Creative – the Grossly Commoditized
High product maturity coupled with high product
miniaturization makes the product grossly
commoditized leading the industry to turn to creative
communication.
Probably Creative – the Value Driven
Fig 2. A still from the Happy Dent-white ad
Collective Creative-isation – a Myopic Utopia
Although we’ve seen numerous cases where this
creative epidemic was a live-wire that energized an
otherwise listless industry, the fact still remains that
there is no innovation like an innovative product.
Especially in a value driven, high involvement
industry like Fast Foods, the fastidious consumer
has the uncanny knack of looking beyond the fluff
for the real quality of food. Thus, while all American
fast food operators like McDonald’s, Burger King,
Wendy’s etc found it worth the while to come up
with and invest in innovative mascots, they realized
soon enough (in 2009) it was not really working.
The attention shifted swiftly to the food on the
platter than the mascot on the signboard, and
justifiably so.
Drivers of Creative-isation – a Generic
model for all Industries
Of the factors identified, the two most influential
(product maturity and product miniaturization) cocreate the framework (Fig. 3) that explains the
conditions under which an industry becomes
collectively creative:
Despite high maturity, the product still retains its
importance due to the value/benefit driven nature of
these industries. Creative advertising acts as a
Positive Reinforcement, provided the consumer’s
perceived value of the product is high.
Possibly Creative – the Newbies
Typically, products/concepts are in a nascent stage
and have the need to demonstrate value, and doing so
in an outlandish manner can at best be a point of
difference-not too relevant to the consumer.
Definitely Uncreative – the No-Nonsense Elite
These are industries where the product itself has an
effectively endless scope for innovation; these are
typically expensive high-involvement products, eg:
white goods. Here, the marketer simply does not see
the need to be creative.
Conclusion
From this discussion and the examples explicated
here, it is evident that there does exist what may just
be called a tipping point of creativity- a point, a
condition after which all players in the industry feel
the urge and mostly succeed in being creative. The
tipping point surely is different for different
industries, but one can, more so in hindsight, explain
why players, as a collective, chose to focus more on
the communication than other avenues that at least
appear to demand and deserve equal, if not more,
attention.
Page 18
The Looking Glass
SOCIAL MEDIA MARKETING:
THE NEXT BIG THING
Abstract
ABOUT THE
AUTHOR
Kothapalli Sandeep is a
2nd year PGP student at
IIM Ahmedabad. He
holds a Bachelor’s degree
in Metallurgical
Engineering from
Jawaharlal Nehru
Technological University
(JNTUH) Hyderabad and
can be reached at
[email protected].
in
In the Indian online advertising space,
which is still in its nascent stage, the
role of social networking sites in
marketing has been growing at a rather
sluggish pace. This article tries to look
at how businesses can actually leverage
the power of networking in the online
space to differentiate from their
competitors and thus emerge successful
in an increasingly competitive scenario.
This shall be illustrated by citing some
classical examples of how businesses
have
benefited
through
social
networking and thus assert that Social
media marketing is going to be the next
big thing in the online space.
Introduction
As part of their integrated marketing
strategies, companies are increasingly
looking
towards
using
social
networking sites and community blogs
for promotional and brand building
activities. In technical terms, this is
better known as Social Media
Marketing, a relatively new marketing
concept that is fast catching up thanks
to the wide reach and pervasive nature
of Web2.0.
Traditional
Marketing
Social Media Marketing
Vs
Traditional
marketing
is
like
“Broadcasting” by the marketer and
basically involves a “Push Strategy”.
This is in stark contrast to Social media
marketing which is more like a
“Conversation” with the consumer and
hence involves a “Pull Strategy”. Before
looking at why Social media has been
so successful and effective in
advertising, let me cite an example. In
the Indian context, one of the most
successful Social Media marketing
campaigns ever run is undoubtedly
the “Sunsilk-Gang of Girls” campaign.
With 754692 registrations till date,
the site itself has become a minisocial network of sorts. The buzz that
this campaign has created has been
of tremendous help to Sunsilk in
increasing its top of the mind brand
recall value amongst girls, the group
that the shampoo targets with the
greatest fervour. With networking,
messaging and chat rooms, a team of
world renowned hair experts, who
call themselves “The Expert Studio”,
give advice to girls on hair grooming
habits and the diet required to
maintain a healthy hairdo.
Platforms
A social networking site essentially
acts as a common platform, bridging
the distance between long lost
friends. These sites enable people
with common interests to come
together. The messages that spread
like wildfire in the online social
networking space are perceived to be
absolutely true and trustworthy as
they apparently come from a trusted
source (read friends and relatives)
rather than the company or the
brand itself. The recent ModiTharoor
controversy
stands
testimony to the fact that news
spreads very fast through social
networking sites and quickly
pervades
other
forms
of
communication media too.
Social media marketing happens on a
huge
splatform
of
websites
pertaining to social networking.
There are various tools that the
marketers use namely
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The Looking Glass
• Social networks : Wall posts, fan pages and
“Likes” on the Facebook page of an
organization
• Live blogging and Tweets to announce
promotional campaigns and product offers
• Link sharing on LinkedIn, Facebook and
Twitter
• Viral Marketing through videos on YouTube
These tools enable proactive engagement of the
consumers
thereby
facilitating
better
communication between them and the company
about their preferences. The company is also able
to efficiently track and monitor the effect of their
advertising campaigns on the consumers. This is
the prime reason why marketers are increasingly
embracing online social media.
How does Social media marketing
happen?
Organizations need to realise that these tools
complement and expand the existing marketing
resources and are not meant to replace them. The
tool an organization uses to communicate in the
online social media space depends on the goal(s)
of their marketing plan. The various marketing
objectives that online social media help
organizations to achieve are:
• Broadcast of news, brand and product
updates; new product launches and PR
• Redressing
consumer
consumer service
complaints
• Advertising and promotional campaigns
• Viral marketing
and
An excellent example of a corporate firm using the
online social media is Dell Corporation. It runs a
community blog better known as “Direct2Dell”.
There is a forum called the “Owner’s Club” where
consumers are free to discuss product updates
and comment on new product releases. Dell also
takes care of its consumer complaints through this
interactive blog and uses the blog to update and
broadcast new product launches apart from
seasonal promotional campaigns and routine
advertising. In a way, this interactive blog has
helped Dell improve its falling reputation
primarily because it allowed its consumers to
interact in a more proactive manner. The gradual
drop in the number of negative blogs (down from
49% to 22%) written about Dell amply supports
this assertion.
Viral marketing is something that has also
received a shot in the arm with the sudden
explosion of Facebook in the Indian online social
media space. Viral ads that spread like wildfire
through social networking sites like Facebook
once they are uploaded on YouTube have become
a common sight. The success or failure of a viral
campaign is measured in terms of the number of
views it is able to garner, its penetration amongst
the online users and the ranking that YouTube
and its users give it. One of the most successful
Indian viral campaigns was Virgin Mobile’s
“Indian Panga League” which has over 2.7lakh
views till date. Though the ad was banned from
being broadcasted on TV, it instantly struck a
chord with the youth which is the company’s
primary target segment.
Emerging trends in social media
marketing
Social media marketing is the next big thing
according to experts. According to the research
done by JuxtConsult, a leading online market
researcher, 78% of the online users actually trust
and believe in peer recommendations rather than
trusting product/brand related claims by the
organizations. Now let us look at some of the
trends that are set to make Social media
marketing the next big thing in the online media
space.
• The popularity of mobile browsing is on a rise.
With the recent 3G auctions promising to bring in
an era of fast and seamless browsing, information
transfer would be faster than ever. The cheapest
3G enabled handset now costs around $50,
manufactured by the Chinese handset maker
Huawei. With 50% of Indian population already
empowered with cellular handsets, there is every
possibility that in future mobile handsets will
become the primary gateway to accessing the
Internet. Hence, it’s not surprising to note that
Facebook has recently come up with
“0.facebook.com” which the official Facebook blog
describes as “a new mobile site that includes all of
the key features of Facebook but is optimized for
Page 20
The Looking Glass
speed. It initially is available through more than
50 mobile operators in 45 countries and
territories with zero data charges.”
• Sharing is an important phenomenon in social
networking sites like Facebook and Twitter,
where online users actually share URL’s and
news feeds. The “Like” button feature in
Facebook has undoubtedly revolutionized
sharing. Apparently, the number of “Likes” your
status message or comment in Facebook receives
is a measure of how popular you are amongst
your friends. According to “ShareThis”, the
engagement value for traffic coming through
shared links is much higher than that coming
from search engines. This probably explains why
Google is very jittery about competing head on
with Facebook. Sites now see up to 50% more
engagement from shared links than search. That’s
why “Horizontal portals” like Yahoo and “Vertical
portals” like Cricinfo have incorporated the
“Share this article” toolbar on their web pages.
• Similarly Youtube which was once considered
just a video posting portal is now being seen
more as a means for increasing brand recall value
and promoting social awareness on various
issues through viral ads. The leading Hindi news
channel “Aaj Tak” came up with a series of award
winning ads that have grabbed eyeballs and also
led to an increase in “Aaj Tak’s” top of the mind
brand recall value.
Inherent Limitations
But as the age old adage goes, every coin has two
sides to it. While we have looked at how social
media marketing is going to set the online media
space on fire, there are again certain inherent
limitations associated with it. B2B companies and
niche brands need to be careful while marketing
through social networks and community blogs,
because they can’t afford to have negative word of
mouth publicity for their services or product
offerings. Thus, for companies, the element of
goodwill and trust becomes an important evaluation
criterion during the decision making process,
revolving around public relations and marketing.
This probably explains why the BFSI sector has
embraced social media marketing more than anyone
else. BFSI companies play the “goodwill and trust”
game to attract and retain their consumers. Social
networking sites and community blogs just work
perfectly for the marketers in the BFSI sector.
But as the age old adage goes, every coin has two
sides to it. While we have looked at how social
media marketing is going to set the online media
space on fire, there are again certain inherent
limitations associated with it. B2B companies and
niche brands need to be careful while marketing
through social networks and community blogs,
because they can’t afford to have negative word of
mouth publicity for their services or product
offerings. Thus, for companies, the element of
goodwill and trust becomes an important
evaluation criterion during the decision making
process, revolving around public relations and
marketing. This probably explains why the BFSI
sector has embraced social media marketing more
than anyone else. BFSI companies play the
“goodwill and trust” game to attract and retain
their consumers. Social networking sites and
community blogs just work perfectly for the
marketers in the BFSI sector.
Conclusion
Social media marketing is still in its nascent
stages in India and offers an exciting opportunity
for both advertisers and marketers. Corporates
need to realise the power of social networking
and embrace it to complement their existing
marketing resources thereby increasing brand
recall of their products and/ or services and
promoting consumer engagement.
Page 21
The Looking Glass
THE APPLE STOREy
ABOUT THE
AUTHORS
Sandip Devoarkonda is a
1st year PGP student at
IIM Calcutta.
The year 2000 was turning out to be a
bad one for Apple. Microsoft was
turning into an unstoppable force,
reaping the benefits of years of
mismanagement in Apple and no
object, let alone an immovable one, in
sight. Market share had nosedived to
2.8% and recent innovations brought
in by Steve Jobs were not delivering
the expected results.
So what did the company, often
acknowledged as the most innovative
in the world, do to climb out of this
slump ? It simply opened a couple of
stores. And then some.
For a consumer electronics company,
Apple rapidly opened gorgeous stores
all around the world. Today it has
around 300 stores in 11 countries.
Each store reflects the Apple
philosophy: simple, functional and
award winning design.
boys”. There were just not enough of
them.
It is often said that once you buy
Apple, you stick with it. This
especially holds true in the PC
segment, where usage habits rarely
stray out of comfort zones.
Unfortunately for Apple, the same
applied to Windows users as well.
Steve Jobs realized that to truly
appreciate their brilliant design,
Apple
products
had
to
be
experienced and mere window
shopping that most electronics
retailers offered would never entice a
newbie. To challenge the Microsoft
juggernaut, Apple needed these
users. And fast. Jobs argued that he
needed only a fraction of Windows
users to switch over to his side and
the margins would take care of the
bottom-line. All he wanted was for
some users to go through the Apple
experience. Enter the Apple Store.
Flagged off initially with a typically
modest target of 5% increase in
sales, these stores doubled up as a
medium to sell the Mac lifestyle
beyond the fan boys.
Fig. 1 Apple Store in Shanghai
So, Why a Store?
From the first Apple-I toolkit to the
revolutionary Macintosh series of
computers, Apple products had always
been innovative. As we now know,
with Apple, the price was never really
an issue. So what was it that kept the
company away from profitability in the
late 1990s? Surprisingly, the problem
lied with what most companies can
only ever dream of: the fanatic “fan-
For a while, the stores remained just
that.
Modest
sales,
nothing
phenomenal but the word was
spreading. Meanwhile, another storm
was brewing. IPods. IPhones. These
phenomenal products got visitors
thronging to the stores and mostPage
of 8
them were first time Apple
customers. A few of them were
bound to consider the Macs and
Macbooks. In 2009; there were 167
million visitors in Apple stores
leading to USD 28.6 billion in sales
(excluding the figures for the holiday
season!). Around 50% of Mac
customers were new to the product
line.
Page 22
The Looking Glass
200
Quiz 2
150
100
50
Sales($ Bn)
Footfall(Mn)
0
Fig 1 Data from Apple Stores worldwide
Apple never tried to position these stores as Point of
Sales. They primary function is to promote customer
interaction with the product line through a Genius
Bar, a dedicated group of “knowledge-tenders” who
answer any product related query. Most stores
conduct summer camps for kids, free workshops to
amateurs and professionals alike on topics like
digital photography, music and moviemaking.
Topics that most professionals will agree are best
dealt on an Apple product. They even have a team
that helps small and medium enterprises with
selecting products that can enhance their business.
1. Which product had the tagline “Born in a
Gym, not in a studio”?
2. Which company is the world’s largest
manufacturer of digital cameras?
3. Which search engine launched a major ad
campaign focusing on the tagline - "Faster.
Easier. Bingo"?
4. What is the claim to fame of Karen Lunel
Hishey in Indian advertising?
5. 'Pegasus' meaning the flying horse, is the
logo of Career Launcher in India. Which
famous magazine has the same logo?
6. Which brand had the ad slogan 'Tomorrow
is mine'?
7. 'What are you made of?' - is the tagline of
which Swiss watch?
8. The 'Joy of flying' is which airline?
9. 'Live every moment' was the tagline of
which company?
10. Which motor companies' logo is referred to
as 'Bow Tie' ?
11. Which Companies' tagline is 'Better Sound
through Research' ?
12. Which Country's ad campaign has the line
"Where the bloody hell are you? "
Fig 2Genius Bar at an Apple Store
The location of these stores is considered so
strategically important, rumor has it Jobs personally
signs off on them. Sample this. In 2008, Apple
opened their largest store till date in Boston. Why?
Boston houses about a quarter-million college
students.
Simple. Brilliant. Apple.
13. Which automotive brand has "Life. Liberty.
Pursuit of the American Way." as its tag
line ?
14. The most expensive part of the body ever to
be insured are the legs of a famous football
player for 60 million pounds. Name the
player.
Quizzes,
Brand
Trivia
and
Identify the personality were
compiled by T.R.Rahul, a 2nd year
student at IIMB
Page 23
The Looking Glass
AMBUSH MARKETING: ETHICAL OR
UNETHICAL
Abstract
ABOUT THE
AUTHORS
Himanshu Nazkani is a
2nd year PGP student at
IIM Bangalore. He holds
a Bachelor’s degree in
Electronics Engineering
from IIT, Guwahati and
can be reached at
[email protected]
.in
Suman Verma is a 2nd
year PGP student at IIM
Bangalore. She holds a
Bachelor’s degree in
Electronics Engineering
from NIT, Jaipur and can
be reached at
[email protected]
Ambush marketing has emerged as a
side effect of sponsorship marketing
by leading companies. This write-up
deals with the forms of ambush
marketing and the various ethical
issues related to it. It delves into
causes which lead companies to
pursue this parasitic form of
marketing and reap benefits at the
cost of competitors. It reveals some
cases which deal with ambush
marketing. The discussion also looks
at the positive aspects of ambush
marketing leading to increase in
competition. Finally it suggests that
very little legislation is there against
ambush marketing and countries
have to take firm steps towards
combating it.
A South African budget airline
Kulula.com's1 ad described it as the
"Unofficial National Carrier of the
You-Know-What". It also had the
pictures of stadiums, vuvuzelas and
national flags. But FIFA said the
airline could not use the symbols even the word "South Africa”. It
claimed that the advertisement
breached South African law "by
seeking to gain a promotional benefit
for the kulula brand by creating an
unauthorized association with the
2010 FIFA World Cup1". However,
Kulula had the argument that FIFA
did not tell that they could not use
soccer balls, or the word 'South
Africa', or Cape Town stadium, or the
national flag or vuvuzelas. Later on
Kulula pulled back its ambush ad
after a FIFA complaint that it
infringed its trademark during the
2010 World Cup. Although Kulula
lost the battle but still it got enough
media attention and publicity out of
the whole scandal. This is one of the
many incidents of Ambush marketing
which we are going to deal with here.
Origin
Ambush marketing is a term often
whooshed in industrial domain.
Marketing guru Jerry Welsh1 had first
coined the word Ambush marketing
as a situation in which a company or
product seeks to ride on the publicity
values of a major event without
having to finance the event through
sponsorship.
It occurs when one brand pays to
become an official sponsor of an
event and another competing brand
attempts to cleverly connect itself
with the event, without paying the
sponsorship
fee
and,
more
frustratingly, without breaking any
laws. Ambush or guerilla marketing
is as undeniably effective as it is
damaging, attracting consumers at
the expense of competitors, all the
while undermining an event’s
integrity and, most importantly, its
ability to attract future sponsors.
Ambush marketing is also sometimes
called as ‘parasitic marketing’.
Parasitic life means dependent life.
Analogous to a parasite the
ambusher is reaping out benefits at
the cost of his competitors.
Direct and Indirect forms
 Direct ambush marketing: In
1994
football
world
cup,
MasterCard received exclusive
rights for using world cup logo,
but
a
rival
Sprints
communication used the logo
without permission. This is direct
attack but can be defended by
laws.
Page 24
The Looking Glass
• Indirect ambush marketing: It can take place by
several means like sponsoring the broadcast of
the event, sponsoring subcategories of the major
event etc. To become the official sponsor of
the 2002 Winter Olympics in Salt Lake City,
Anheuser-Busch
paid
more than US$ 501
million. In accordance
with its agreement, it got
all rights to use the word
"Olympic" and the fivering logo. Schirf Brewery,
a local (and very
small) company, came
Figure 1: Unofficial Beer
up with the rather
ingenious (and apparently legal) idea of marking
its delivery trucks with "Wasutch Beers. The
Unofficial Beer 2002 Winter Games." In
accordance with copyright rules, Schirf had
avoided using either the word 'Olympics' or the
five-ringed logo. However, without a doubt it had
connected itself to the games.
Causes of Ambush marketing
There are several reasons why companies go for
ambush marketing. Few of which are1
• Exponentially increasing (almost prohibitive)
sponsorship prices
• Increasing marketing competition
• Clutter in sponsorship (Too many brands
associated with event)
• Sponsorship enables the marketers to target
their consumers in an efficient manner. Every
company wants to enter even if it doesn’t have
money and resources. So if BMW wants to reach
CEOs, they can do so more efficiently by
sponsoring a golf tournament than by
advertising on TV
•
•
Sometimes companies have no other platform
for reaching the masses due to governmental
restrictions on advertising etc. (for example
many tobacco & alcohol companies cannot
directly advertise)
Brand's image enhancement by virtue of
association with a high profile event
Given the above situation, the companies who
want to buy, or can afford to buy, do buy; others
have to consider their marketing alternatives.
The point is that, in buying a sponsorship, a
company buys only that specific event. It does not
purchase the rights to all avenues leading to the
public's awareness of a property; and neither does it
buy the rights to entire consumer mind space in
which the sponsorship is one resident. The mind
space here refers to various associations (ideas,
images, and events) that occur in the consumers'
minds when they think of the sponsored space. This
mind space is not created by anyone and hence no
one "owns" it.
Non-sponsors want their product or service to be a
part of the mind space without sponsoring the event.
So long as they do not claim that they are the sponsor,
they are free to pursue other event-related activities
(e.g., television advertising on the event broadcasts,
onsite events, and other such activities), to
underscore their company's support of, and
dedication to, the thematic space which the event
occupies.
The contrary notion, put forward by event organizers,
that non-sponsors have a moral or ethical obligation
to market themselves totally away from the thematic
space of a sponsored property, is absurd because
sponsors have bought a specific property; they have
not bought a thematic space.
Given the above then, the real marketing game and
the concerns of ethics and fairness begin once a
sponsorship has been undertaken.
How ethical is Ambush Marketing?
Ambush marketing has always remained in debates
over the issue of ethics. There is a blurred line of
demarcation between ethical and unethical issues in
ambushing, which is often intruded into other side.
Moreover, where does the law stand in such cases of
ambush marketing? Usually, somewhere out of view.
Unlike piracy or counterfeiting, ambush-marketing
cases are rarely actionable, especially if the
ambushers know what they are doing. In 1992, the
granddaddy of boy bands New Kids1 on the Block
sought legal action against newspaper USA Today,
when it set up a charge-per-call service asking
readers to tell them what they thought of the New
Kids. The New Kids’ suit ended unfavorably.
Page 25
The Looking Glass
In India there is almost no protection against
indirect ambush marketing. However, for direct
ambush marketing there are several laws like the
Trade Practices
Act, Trade Marks Act and The Copyright Act etc.
Ambush marketing cases, covered by media are
those involving elite brands having enormous
marketing capability and funds such as Nike, Adidas,
Reebok or Coca-Cola and Pepsi. Between such large
and equal players, ambush marketing is deemed a
last ditch technique, and the question of ethics is
more or less unimportant. To them, however
ambush marketing seems to be a last resort and the
only way to compete.
Case studies from India
Studies have shown that ambush marketers often
get at least as much mileage as the official sponsors.
That explains why ambush marketing is increasing
at an alarming rate.
Challenges in Ambush marketing
Ambush Marketing has to be within the premises of
law, out of which it is illegal and can ruin the
company’s image. It needs creativity to design
ambush strategy. The fear of law suits and heavy
penalty/compensation is always there. You never
know what could be the competitor’s reaction. Once
consumers get to know about ambush marketing
their attitude towards the company practicing it may
become negative.
Conclusion
Ambush Marketing can be understood as a marketing
strategy occupying the consumer mind space for an
event. What Ambush Marketing is not, is some
underhanded attempt to take advantage of sponsored
properties without paying the associated fees.
Successful ambush strategies feed on ill-conceived
sponsorships and inept sponsors; in that regard,
Ambush Marketing is the natural result of healthy
competition and has the long-run effect of making
sponsored properties more valuable, not less.
Although ambush marketing is not illegal or
unethical, it may sometimes lead to severe damages
to one company’s image and undue benefit to the
other. Proper legislation is therefore required to
combat such trends in marketing environment.
Kingfisher’s Ambush Marketing
Kingfisher Airlines adopts an innovative marketing
strategy to snatch attention from Jet Airways'
advertisement. They want to tell that the reason
behind Jet Airways' change is Kingfisher. It seems
like Jet Airways will have to wait for a Kingfisher
Airlines hoarding to come up before it lets the good
times roll in this game of advertising oneupmanship.
Nothing Official about it
Perhaps the best known example of ambush
marketing in India came during the 1996 cricket
World Cup when Coke paid Rs 40 crore1 to be called
an official sponsor, but Pepsi's brilliant counter ad
"nothing official about it" clearly occupied more of
the consumer's mind space.
Page 26
The Looking Glass
TIP-TAP-TOE: CLASSIC OR ARCADE?
In the roar of the red ocean as the
wave of social media crashes at the
threshold of marketing practice, it is
but natural to wonder at the
gravitational force that kindled the
wave and made it so huge.
ABOUT THE
AUTHORS
Srilakshmi Mukkavilli is
a 2nd year PGP student
at IIM Calcutta
“Let us call this game of
marketing the „Tip-TapToe‟: „Tip‟ping the
market by targeting the
powerful connectors,
„Tap‟ping into the market
by creating the context
to ensure acceleration
and being on one‟s toes
to protect and maintain
the captive market since
it can nosedive as fast as
an avalanche.However,
the game has two distinct
variants – the classic
mode and non-classic
mode”
As noted by academicians, the
phenomenon of ‘Tipping point’ is
visible in the recent social media
wave. So is it in the viral videos of
yesteryear and the underdog movies
that succeeded at a surprising scale.
They point out that ‘Tipping point’ is,
in the context of marketing, the
phenomenon in which an idea or
brand, with a considerable worth in
itself, expands its scope through a
few people who have high degree of
social connectedness, in a context
conducive to such viral transfer.
This explains the success of social
media sites like Facebook and videos
like ‘Charlie bit my finger – Again!’
transmitted virally through it.
Let us call this game of marketing the
‘Tip-Tap-Toe’: ‘Tip’ping the market
by targeting the powerful connectors,
‘Tap’ping into the market by creating
the context to ensure acceleration
and being on one’s toes to protect
and maintain the captive market
since it can nosedive as fast as an
avalanche.
Classic or Non-classic?
However, the game has two distinct
variants – the classic mode and nonclassic mode as we call them.
‘Classic’ mode refers to the slightly
less demanding version of building
up the captive market for a product
which
inherently
has
the
characteristics that make it suitable
for Tip-Tap-Toe. They are the classic
network effect products that come to
mind when one talks of exponential
demand growth. For these products,
utility increases as the user base
increases. Examples can be social
networking sites like Facebook,
industry associations where all the
players need to come together,
telecom services with huge withinthe-network discounts, products like
iPod,
Xbox
with
proprietary
applications. In all these cases,
volume is required to render the
business model possible in the first
place.
‘Non-classic’ mode (to denote the
alternative for ‘classic’ mode) refers
to marketing products which have an
intrinsic spark, through viral route.
An important difference here is that
the functional utility of the product
does not change with the number of
people using it. Marginal consumers
do not enjoy any extra ‘functional’
utility compared to the early
adopters. However, it should be
noted that the two consumers do not
get the same ‘total’ utility, because, as
the product becomes famous, that is
as more people start using it, the
‘emotional’ utility obtained by the
marginal consumers is much higher
than the ones who used the product
when it was not so famous.
Success stories
Page 27
The Looking Glass
include viral videos, hit movies, brands like crocs
etc. In general, products that can potentially become
famous by herd behaviour initiated by a few opinion
leaders are examples of this phenomenon.
Thus, though the process of multiplication of
demand is the same for ‘classic’ and ‘non-classic’
products, the motivation behind a marginal
consumer adopting the product is different. It is the
exponentially increased functional benefit in case of
classic products and the sum of a ‘fixed’ limited
functional benefit (the spark in the product) and an
exponential emotional benefit in case of non-classic
products.
What difference does it make?
‘Tip’ stage:
For classic products, the focus is on improving the
very value proposition of the product by building up
volumes as fast as possible, in order to exist in
business beyond the initial protection period. Hence
the strategy involves ‘seeding’ the market (‘Tip’
stage) often by offering the product for free. From a
marketing viewpoint, however, this ‘seed’ market
need not be so limited in size and the people need
not be meticulously tested for high opinion
leadership factor.
For non-classic products, the selection of seed
market is important as it is limited by high costs
involved to target the specific set of audience,
convince them and convert them at least to
‘missionaries’ if not ‘evangelists’ of the brand. These
people are scarce, given the high opinion leadership
factor required. However, the connectedness factor
of people in the seed market is equally important in
both the cases lest the market should grow only in
silos.
‘Tap’ stage:
Though the function of demand is exponential in
both cases, the mechanism of build-up is different
for the two cases.
As the sheer volume of people using the same
telecom provider (a classic product) increases, it
makes economic sense to the marginal customer
to switch to that service provider. i.e., the product
promotes itself with increased benefits to offer.
Whereas in non-classic products, the product
practically remains the same (except for the
support of say, goodies etc. in the name of a movie
etc. which help increase the movie’s appeal to be
watched) and the emotional benefit hinges to a
large extent on the fact that opinion leaders have
adopted the product.
Similarly, the environment conducive for build-up
should be more carefully maintained in nonclassic mode compared to classic products
because the reason to buy classic products is
strong enough and not as sensitive to
environment as that for non-classic ones. So the
environment should be more energetic to
reinforce brand image and should carry the
‘legacy’ of being liked by many people to
encourage consumption of non-classic products.
‘Toe’ stage:
Here the classic products are at a much greater
risk due to inadequacy of information to a
consumer. That is, for a classic product, if for any
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The Looking Glass
reason people start pulling out from the telephone
network, the marginal consumer gets the
information much quicker than the marginal
consumer in non-classic products, who is in fact not
much affected by the recent decline in popularity of
the video. It was a famous video and holds the same
alluring interest as long as he/she has not watched
the video. The fact that the video was not being
shared so frequently by so many people these days
does not matter so much to him. In this sense, the
brand image of the non-classic product is more
immune to downfall.
Only difference from a gaming environment here is
that marketers cannot choose between the two
variants (strategies) of the Tip-Tap-Toe game – it is
decided by the nature of the product.
What’s in it for India?
‘Classic’ applications possible in the near future in
India range from capturing the 3-G market, political
parties (only a majority of vote volume would
ensure realization of value proposition – the
agenda), issue of UID cards (complete adoption of
standardization by Indian population is required for
the use of UID to be started), to building a frequent
flier community for low cost airlines.
Non-classic applications are generally ‘aspirational’
for the marketers to create iconic brands by driving
consumption through consumers themselves, riding
on the power of initial adopters. Hence practically
any category that has a functional ‘and’ an emotional
value which increases with popularity of the brand
is fit to apply the non-classical approach. Indian
brands face a competition from global brands on
this front since the global brands have a head-start
in terms of the iconic following they have in their
own nations. Since Indians consumers are exposed
to the huge imported brand equity from day one, it
is but likely that the consumers are swayed even
before the Indian brand, despite having same
functional characteristics, tries building up the seed
market. However, the ‘approximately unique’
brands where there are no direct competitors with
the same functionality, like movies, celebrities etc.
the marketers can explore herd behaviour to
promote the cult image.
Answer Quiz 1:
1. Nokia started as a wood pulp mill, the
company expanded into producing rubber
products in the Finnish city of Nokia. The
company later adopted the city's name
2. British Physics Laboratory
3. Monster.com
4. Wrangler
5. Bharti Airtel
6. Doordarshan
7. Spanish
8. West Indian Vegetable Products Ltd
9. Freescale Semiconductors
10. Electrolux India
Answer Quiz 2:
1. Bajaj Pulsar
2. Nokia
3. Yahoo
4. 1st Liril Girl
5. Reader’s digest
6. Reebok
7. TAG HEUER
8. Jet Airways
9. Airtel
10. Chevrolet
11. Bose
12. Australia
13. Cadillac
14. David Beckham
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The Looking Glass
CLOUD MARKETING
In the modern world of business, it is
useless to be a creative original thinker
unless you can also sell what you
create - David M. Ogilvy
Marketing
is
selling soaps!
ABOUT THE
AUTHOR
Surjeet Singh Choudhary
is a 2nd year PGP
student at IIM Lucknow.
He holds a Bachelor’s
degree in Information
Technology from
Engineering College
Kota and can be reached
at
[email protected]
all
about
No more. Information Technology
companies today need marketers to
market their services and products.
Though, till today most of the IT
companies
have
had
limited
marketing capabilities. Most of the IT
companies (especially medium size)
have a strong sales force but limited
experience in other marketing
dimensions like public relations. Here
it can be argued that identifying and
targeting your audience in the IT
sector is easier than traditional
marketing sectors like FMCG or
Retail; so the marketing efforts
required may be minimal, but in
today’s
business scenario
the
importance of communicating your
value
proposition
and
differentiating from competition in
technology
sector
cannot
be
undermined. Today Information
Technology industry is changing very
quickly, and this change can be
primarily attributed to the following.
Firstly,
the
pace
at
which
commoditization is happening in IT is
incredible, as Nicolas Carr talks about
it in his article titled “IT doesn’t
matter”. Secondly, considering the
fast pace at which technology evolves,
it becomes necessary for companies
to communicate the benefits of the
latest versions.
One of the most important jobs of
marketing is to communicate to the
customer the value proposition of the
product/service
being
offered.
Probably this is the reason why we
have a well established marketing
team in place for FMCG and Retail
sectors. But if we glance at the IT
sector, barring few global companies
like IBM, most companies do not have
large marketing teams. IT companies
do have decent sales forces but those
mostly look after generating leads and
dealing with customers.
If we look at the developments
happening in the IT industry in the last
few years, one of the buzzwords is
Cloud computing. It is Internet-based
computing in which shared resources
are provided on demand. Cloud
computing customers do not own the
physical infrastructure; instead they
consume resources as a service and
pay only for the resources that they
use. Inside the cloud arena we have
two basic players, the cloud hosts like
Amazon, Microsoft etc. and the cloud
service providers which basically host
their softwares on the clouds for their
customers. Most IT sector companies
have always lacked on the marketing
front and now it is high time that they
focus on it, especially the cloud
software vendors. There are several
reasons for this:
1. With
evolution
of
new
technologies at such a rapid rate it
becomes
necessary
to
continuously
update
the
customers with the benefits
associated.
2. With IT going into the commodity
mode, marketing makes more
sense. Commodity businesses
mostly compete on the basis of
price but if you want to position
your company ahead of the
competition, building a brand for
your company becomes very
necessary. Also, a good brand can
fetch a slightly higher price for
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The Looking Glass
its products.
3. When it comes to newer concepts, especially
with Cloud computing, it is necessary that you
instill a sense of confidence in the customer.
Branding can be used to build their confidence
level.
4. With margins continuously declining due to
commoditization and competition, branding
could be used as a means to stretch the profit
margins. This could be countered as cost would
increase with branding; still I believe branding
should work in favor of the seller in the long
term.
10. Demand for SAAS applications are
forecasted to grow heavily over the next 4-6
years. The marketing strategy needs to be in
place now to tap the demand. IDC
(International Data Corporation) forecasts
Cloud Services revenues to reach $55.5Billion
in 2014.
As part of Cloud marketing initiatives companies
should aim at:
1. Building a distinct corporate brand image.
Aim at building a trusted brand name that
would not only project you as a differentiator
but also help you in attracting best talent.
5. Small and medium sized customers form a large
segment for Cloud applications. Thus one needs
a good marketing team to manage mass
communications with the smaller customers
which should facilitate a good chunk of
revenues.
2. Market as you develop. With technologies
being upgraded almost on daily basis, one
needs to market them as soon as they are ready
to go live. Many useful upgrades are not
marketed effectively and thus benefits not
communicated effectively to the customer.
7. Cloud software providers need to use marketing
as a tool to understand their customers and
communicate the value proposition of their
service/product.
4. Educate your customer. Let the customer
know about your technology. Engage the
customer in trainings, webinars etc. This will
also set customer expectations, which is equally
necessary.
6. Take care of your customer even more than
earlier as all that he/she needs to do now is
subscribe to a new cloud provider. Switching
costs have decreased now with the cloud/SAAS
models.
8. As Cloud Software providers focus on small and
medium businesses, they need to have more
channel partners and thus a more focused
team to manage them. HCL, a major Indian IT
company has around 150 domestic channel
partners and are looking at making it 400 soon.
9. Failures of Cloud applications are talked about
much more than the internal failures of the same
applications. Cloud computing providers would
be under immense scrutiny for their
performance and delivery. Thus their
reputation and relations with the customers
are always on stake, so they need to have
better communication with their customers, and
Marketing teams could serve this purpose.
Remember it took just one disruption in
Gmail services during Feb 2009 to let it be
referred to as Gfail!!
3. Market the service not the product. Market
the service spectrum that you will provide to
your customer rather than only marketing the
Software (in SaaS) or the platform (in PaaS).
5. Think long term. Cloud vendors spend a lot of
capital initially and wait for returns in future
years. Thus, they should focus on the long term
benefits. A price cut may give them a new
customer but what really matters is, for how
long that customer would stay with the vendor.
Few marketing channels that could be used by a
Cloud player are newsletters, Free Trials, Email
Communication, Public Relations, Channel partners
and Webinars etc. Today all the buzz that we see
about cloud computing is because of marketing
done by bigger IT companies that have already
established the cloud hosting platforms. Now it’s
the time for cloud software vendors to take the
Marketing side of the businesses seriously.
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