On the eve of the Asian Games in 1982, Indian consumers switched from the black and white TV to colourTV. Another leap is now from colour TV to high definition TV. In India, there are 4 million HD TV subscribers, being almost 10 per cent of DTH subscribers. India sells 8 million TV sets, of which more than half are HD and 4K TV sets. ( 2014 ). This is likely to rise to a share of 80 per cent of all sets sold in 2019. Many HD TV transmission channels are being launched by the broadcasters, e.g. Star World, Premiere HD, HBO Hits, FX HD, Star Movie Select HD, MN+, Café HD. HD movie channels are popular. They can also show unique content. HD enriches the overall TV watching experience. In Hindi, we have Colors HD launched in 2011. HD channels have minimum advertising or are free of advertising. They show ads lasting for four to five minutes per broadcasting hour. HD channels bouquet is offered on subscription by the broadcasters. They generate better average revenue per user ( ARPU ). HD channels attract premium advertisers. Advertising revenue comes from the marketers of premium products. They allow a higher ad rate. As more and more LED TVs get sold in India, soon the whole TV viewing is going to be in high definition.
Month: October 2015
Break-even Analysis
These days a great deal of importance is attached to cost-volume-profit relationship, which, as the name itself indicates, is an analysis of three distinct factors — cost, volume and profit. The study of cost-volume-profit relationship is frequently refered to as the Break-even Analysis. A break-even point is that quantity of output at which the total sales revenue equals the total cost, assuming a certain selling price. As BEP represents a no-profit-no loss point, sales beyond BEP result in profits and the further the sales are from the BEP, the higher are the profit profits. Sales below the BEP represent losses to the marketers.
Determination of BEP: There is a company whose fixed overhead is constant at Rs. 6000. It produces and selles an out put of 25 tonnes. Its selling price is Rs. 600 per tonne and its variable costs are Rs. 200 per tonne. Thebreak-even point may be found using the following:
Break-even point ( In Quantity ) = Total Fixt Cost/ Unit Contribution to Overheads
=Total Fixed Costs/ Selling Price – Variable Costs
= 6000/ 600 -200
= 15
Here, the assumption is that fixed costs remain constant for a specified level of activity. The production may vary from zero to the full projected capacity and yet the fixed costs do not change. This is valid for a limited short period. The second assumption is that the variable costs vary directly and proportionately with the volume of production. Thus double the level of activity and the variable costs would be twice the previous one. Another break-even point will be found for another selling price. The break-even point is for Rs. 600 per tonne price only. Break-even point of 15 at a price Rs. 600 per tonne means that if the market buys less than this quantity, the firm will be at a loss. The output produced and sold in our example is 25 and it is 10 units beyond the BEP.
Social Media Marketing
Marketers these days consider both the social media and the digital media in their marketing and promotional strategy. When Maggi noodles are being re-launched, they have designed a campaign for the digital and social media. Six short films are being shown. They reflect the spontaneous engagement with and affection for the product. The campaign has already garnered 7 million views on digital and social media platforms. Social media can make or mar a product. When Maggi was assaulted on the social media, it disappeared within days. Social media is considered highly suitable for Gen Next brands, say a smart watch or radio cab service. These are the millennial brands run by the millennials and catering to the millennials — such brands are created with the digital consumer in the mind.
Brands which use social media use them for building reputation, acquiring new business and creating buzz and advocacy. Customers can give feedback and can have their grievances redressed directly. Social media thus can be used for customer relations. New customers are acquired by inducing free trials. Interesting content is made to generate interest in the existing as well as new customers.
FMCG financial brands in banking, insurance and credit and automobiles too are turning to social media and are making applications that integrate with such platforms.
Established organisations continue their traditional marketing, and are making further forays into social media by creating compelling stories.
Bankers have created applications such as Ping Pay ( Axis ), icici bankpay ( ICICI ), Kay Pay (Kotak), Pockets (ICICI). Insurance brands like HDFC Life asked people to participate in world cup #My Team-MyPride campaign to identify Sar Utha Ke Jiyo moments. Pepsi asked contestants to make a 30-second commercial for IPL matches. The best commercials were to be aired during the matches. YouTube users and content creators were motivated to spread the word. Sonam Kapoor advises people on relationships and the break ups. Actually these break ups are related to styling products. After such break ups, you can think of L’Oréal, since you are worth it. It is an attempt to sync the message beautifully.
Advertising campaigns these days are comprehensive — they include social media. Agencies design the message accordingly. The elements in the message are rearranged. Gillette Women against Lazy Stubble used this strategy.
Social media have sheer power of reach. To begin with, communities were built, but they just complained about their grievances. The relationships were transactional. There was no attempt to build on emotions. YouTube broadcast long and boring commercials. All this made Internet a passive broadcasting entity.
All this was bound to change. Since 2014, Internet has emerged as a powerful media. Facebook promoted Xiaomi, which has become the fastest growing brand. Vodafone and Airtel too used social media. Reliance used Twitter. This is because our understanding of the social media and the behavior of people there has improved.
Instead of brand stories, social media circulated stories of the people. All stories must be woven around people. How to do this? Here you have got to be selfless. That then satisfies your selfish motives. Brands have to identify common values, which can be shared with people. Social media is live story-telling, and not the recorded version of a TV commercial. Certain Facebook pages command millions of likes, thus demonstrating the power of Facebook presence. Brands have to make people heroes.
The flow of information in pre-Internet days was unidirectional — from the company to the consumers. These days it is from consumers to consumers, and from consumers to companies. Most consumers do their buying search online, and they buy the product offline ( this is called RoBo ). Yaa, certain transactions are closed online also. Brands generate leads through various efforts, e.g. QR codes. This leads to online promotions.
Digital advertising must be explored in all its dimensions — search engine optimization ( SEO ), search engine marketing, emailers, display advertising across portals, verticals, in-mail boxes, ad networks and social platforms. Each must be evaluated separately to learn about the response generation.
A company must support the online efforts by setting up retail and direct sales structure offline.
Facebook and Google in Digital Marketing
In online advertising, Facebook and Google are giants. Facebook in the US is projected to collect $ 7.7 billion in retail digital ad revenue, and Google $ 23.3 billion ( eMarketer report ). Though the US advertising nerve centre is Madison Avenue, Silicon Valley too is becoming more and more influential.
Facebook introduced a rating metric just like the TRPs for TV commercials. This rating matrix will facilitate ad buying across television and Facebook. Nielsen Digital Ad Ratings from Nielsen will give the combined performance of the TV and Facebook ads. Media planners now could buy the digital ads with as much ease as they had while buying the TV ads. Facebook and TV are complementary. Facebook is attempting to woo TV advertisers who are eager to reach mobile devices such as Tablets and smart phones. TV advertisers know that these mobile devices are increasingly being used to watch television programmes. Google wants to target ad campaigns to consumers using their email addresses. This programme is called Customer Match. For instance, companies can upload a list of customers’ email addresses gleaned for its loyalty membership. These customers can be shown specific ads when they are signed into Google. This programme will allow the companies to show their customers ad campaigns if they have not recently shopped for its products.