Marketing Ganga

Author: Shabbir Chunawalla

  • Digital Advertising Spend in India

    According to a recent forecast of GroupM, digital advertising stands at 9.5 per cent of total advertising, thus the size of digital advertising is Rs. 4661 crore. The total advertising is estimated to be Rs.48,976 crore. In another five years, digital advertising could touch 20-25 per cent of total advertising by which time, it would have crossed Rs. 10,000 crore mark.

    In India, TV and print still remain the largest contributors to the total advertising. They stand at Rs. 22,446 crore and Rs. 16,872 crore.

  • Mobile Banking

    Customers can access their bank accounts online either through a desktop or mobile. Mobile devices are increasingly being used for accessing the accounts, and have in some specific cases overtaken internet banking on the desktop. The transactions on mobile are done through apps, some of which allow transactions without a data connection. The transaction data is sent through an SMS  to the bank’s server. HDFC and Kotak are the big players in mobile space. Online transactions account for more than 60 per cent of all transactions at HDFC — both through internet banking and mobile app. Mobile banking might overtake internet banking by 2016. Banks realise that the lines between internet banking and mobile banking are getting blurred. Earlier online internet banking was done on PC. But these days, there is a wide variety of mobile devices. A site should be accessible on all platforms.

  • E-Wallets

    In 1981, the first credit cards were launched in India. Later, debit cards were issued. There are  57.4 crore debit and credit cards in circulation. It means on an average 1.6 crore cards a year. The number of mobile wallets in the country is 11.5 crore. They were first launched in 2007. That comes to an average of 1.4 crore a year.

    It is the philosophy of keeping the common man at the centre. The ability to innovate is another tenet these start ups bring forth. CitrusPay, Oxigen, Paytm have forced the established bankers to take notice. All traditional bankers have now mobile apps.

    RBI expects double authentication and that has given mobile wallets and upper hand. Mobile wallets provide seamless payments to cab operators. A large number of customers are reluctant to log in to their bank accounts for minor transactions as they fear electronic fraud. They, therefore, prefer e-wallets.

    Does it make sense when  bank account in a bank has already a wallet? It is just a way to circumvent the second factor authentication by putting up a wallet. A wallet just holds money. So does a bank account Banks have become fond of the word “wallet”.

    According to Paytm, it is a platform for transactions and banking is a platform for savings. Paytm drives cash users to move to online transaction.

    Indian banking has taken cognisance of the bottom of the pyramid by moving into digital space and by financial inclusion, having opened accounts under the Jan Dhan Yojna.

    Types of Wallets

    There are four types of mobile wallets.

    Open wallets allow you to buy products and services, enable you to withdraw cash from ATMs or banks and transfer funds. These services are launched in collaboration with a bank. M-Pesa ( Vodafone and ICICI ) is one example.

    Semi-open wallets allows you to transact with merchants that have a contract with the wallet company. You cannot withdraw cash. You are supposed to spend what you load. Airtel Money is an example of semi-open wallet.

    Closed wallets are popular with e-commerce companies. You have to lock a certain amount of money with the merchant once there is cancellation or return of the order. Gift cards are also closed wallets.

    Semi-closed wallets do not permit cash withdrawals or redemption. They allow the buying of goods and services at listed merchants and perform financial services at listed locations. Paytm is an example of semi-closed wallet.

  • Distribution in India

    Indian markets have changed quite a lot in the last few years but still the distribution system has remained the same. Goods produced by the factories move to the Consignment and Forwarding Agents (C&FA). Some of them are Consignment and Selling Agents (C&SAs) as well. The goods further pass down to the stockists in the towns, who put them into the wholesale and retail outlets. The consumers lift the products they need from the retail outlet, where they can see, touch, feel and buy them. In the last 400 years, the system has remained unchanged.

    There are signs of change now. We come across multi-level marketing from Oriflame, Amway and Modicare. In your outings, if you come across a comely woman soliciting your attention, it should not be mistaken as her falling for you. She could be a representative of a multi-marketing company.

    There are organised retailers now. They run convenience stores and super and hyper markets all across the country. They are located in big malls.These organisations do direct purchasing in bulk from manufacturers and big marketers and pass on the benefits of economies of scale to the buyers.In future, these big retailers might send their representative to the customers.

    There are online retailers who sell electronics, books, appliances, mobiles, books and outfits by creating a marketplace and bringing the buyers and sellers in contact. They are supported by powerful algos and payment gateways. They sell products at discounts and do the home delivery by a tie up with the logistics companies. Many more changes are perceptible — direct marketing, vending of brands, teleshopping and TV channel selling. A lot is likely to change in the age-old distribution system.

  • Advertising Start Ups

    It is not technology alone that spawns start ups.  Advertising too has start ups — agencies that aim to deliver creative solutions in a digital world. The existing agencies lack the technological competence. They are restricted to the TV  screen, whereas the consumers have jumped to the laptops and mobile screens. The ads are interactivity driven. There is a big opportunity  here to craft the content. Such start ups build up a niche expertise. Later they are open to equity partnership and buy outs. Social street, The Mob, Tango Media are such niche agencies at the cusp of advertising and technology. These start ups are set up by people who break free of the ad networks. Business and brands follow the creative people, and would shift to whoever they go. These start ups take care of fast moving consumer goods (FMCG), consumer durables and e-commerce. Of course, big networks are bureaucratic and unwieldy. They may not foster creativity. Start ups have the freedom. They do attract big business, but over a period of time, whether the business will be adequately served or not is to be seen. There may be constraints operating on the start ups. There is no big network to support them.

  • Advertising Model

    Yester years advertising merely used to inform us about the availability of a product. This product has a set of features, 0f which one such feature puts it apart from the other competitive products. This is called its Unique Selling Proposition (USP). We moved the from products to brands. A brand is a name. It provides an identity. It takes years to build this identity. A brand goes beyond a name — it has a symbol, a colour, USP, slogan, a personality, a character, a charisma and brand experience itself. Brand experience makes it desirable to possess and use the brand.Brands are advertised. Brand managers decide the purpose of the brand to drive the advertising brief. It is expressed as Brand Proposition Statement (BPS). The agency works on it, and crafts an Advertising Proposition Statement (APS). This leads to the creatives.

  • Audio Logos

    Audio logos are short, punchy musical riffs that we hear at the end of the commercial, usually when the company’s logo pops onto the screen. Audio logos are generally two-to-five tone. These are used as communication tools, e.g. the roar of MGM lion or the ‘hoo-hoo’ of the Pillsbury Doughboy. They become identifying measures for a company.

  • Genesis of Vicks Vaporub

    Lunsford Richardson was the pharmacist who shifted to Greensboro, North Carolina in 1890. He found that his children kept falling ill and developed a salve containing menthol, eucalyptus oil, camphor, cedar leaf oil, nutmeg oil and thymol to treat them. When the experiment proved successful, he decided to market the salve under the name of his brother-in-law Dr. Joseph Vicks, partly because he was a respected physician and partly because his name was short  enough to fit  on the labels pasted on the jars. Thus came into existence Vicks Vaporub.

  • Big Bang Ideas

    Management theorists put forward big bang ideas such as TQM, Core Competence, Bottom of the Pyramid. These ideas were the solutions to the problems. Since now in the digital age, fresh new problems have arisen, the old ideas will soon give way to new ideas from the new age gurus. Mostly the academicians were the source of the new ideas. They are these days being evaluated on the basis of publications in reputed journls. These research papers are highly mathematical, but are short on new ideas. There are non-academicians such as Marshall Goldamith and Charan Das who interact with the industry and discuss new ideas. The Ph Ds these days are drawn from diverse disciplines, and not necessarily from management discipline. That they have no interaction with business is a big constraint on the emergence of new ideas. We do require new ideas to satisfy today’s context and eco-system. According to Vijay Govindarajan, Tuck School of Business, Harvard Business School, IIMs have been around for more than 50 years, and the Indian School Business has been around for a decade, but they have yet to produce a big idea. One who comes with a big idea will be amply rewardedw today. There could be earnings from directorships, speaking assingments and book royalties. Social media is the apt source for future big ideas. So also the field of business analytics.

  • Social Media Assault on Brands

    Recently, a customer posed a KFC chicken piece resembling a rat, and posted it on social media. It went viral. KFC immediately nipped the trouble in bud. It undertook the DNA analysis and proved it is chicken. Social media is like word-of-mouth. Even when one customer bad mouths a brand, it can bring down a brand. To begin with, social media was used to build the brands. But these days brands are assaulted on the social media. There should not be silence on the part of the company. If the company is at fault there should be an apology. If not, there should be explanation that is assertive. It should not be too formal. It can have a tinge of humour. Social media should be tracked to learn what is being written about the brand . Whenever, there is a spark, it should be dealt with. It should not be allowed to get converted into fire. There should be a crisis management team. A crisis is a unique situation and the response should be on hour-to-hour basis. When UP FDA found presence of detergents in Mother’s Milk, the company was quick to explain its milk collection and processing, and assert that such milk would not reach the retail shelves.