Marketing Ganga

Author: Shabbir Chunawalla

  • Brand Development Index(BDI) and Category Development Index

    To a media planner, two indices are important –BDI and CDI. BDI indicates sales of a brand as a percentage of population.

    BDI= Percentage of brand’s total all India sales/ Percentage of total population x 100

    This index enables a media planner to allocate the media budget by setting his priorities.

    CDI measures the sales potential of a product category. It takes into account the potential of all competitors selling the same category.

    CDI= Percentage of product category total all India sales / Percentage of total population x 100

    When both the BDI and CDI are high, we have to spend more on media to maintain them. If there is low BDI and CDI, we have to see why our brand fares poor and devise competitive strategies.If BDI is high, but CDI is low, we have to examine advertising initially, and question whether it will do any good.

  • Line Extensions

    When a brand is extended to the same product category, it is called line extension. In line extension, the two constants are the brand and the product category. Thus we can keep the mineral water brand constant, but extend it to bottles and pouches of different sizes. We can introduce several colours of shampoos under the same brand name. We can have Colgate Dental Cream and Colgate Total, both with different ingredients. The same product can be presented in different forms such as Vikoryl Syrup from Alembic and Vikoryl Tablets, both from common cold. A syrup can be offered in different flavours, e.g. Frooti mango and Frooti raw mangoes.

    Line extensions allow us to cater to the different segments in the market. A wide variety of products can be introduced under the umbrella brand name to cater to the differing needs of the customers. Line extensions such as American Express Platinum card, American Express Gold card, American Express Green Card give a lot of flexibility to the organisations to charge different prices. Extensions help us utilise the excess capacity if any. As launching a new brand is costlier, it makes sense to offer extensions. Extensions give us more retail presence. Sometimes trade channels demand line extensions,e.g. Lovable bras were available but the brand is extended to Lovable T-shirts. Extensions can be introduced in response to competitive pressure, thus Colgate was obliged to introduce Colgate gel after the entry of Close Up. Extensions rub off the brand image across all the versions.

    Of course, extensions sometimes result into over segmentation and confusion. If extensions dilute the brand image, there could be brand switching. As extensions are easy, we sometimes forego the possibility of developing a new brand. As extensions means more retail shelf space, the trade relations are affected. According to Ries and Trout, extensions make the brand weaker and vulnerable.

    Extensions may make us neglect positioning. Ponds talc has a strong skin care image. When extended to Pond’s toothpaste, the original positioning of skin care gets diluted. In extensions, brand is treated just as a name that can be put on any product. Many products are hung on the same name. When brand is extended to a different, product category, it is called brand extension.

  • Twitter – 140-Character World

    Twitter was created and launched by Jack Dorsey, Evan Williams, Biz Stone and Noah Glass in 2006.It has 500 million plus registered users. Tweets are short messages of less than 140 characters. Everyday, more than 350 million tweets are posted. It handles 1.6 billion search queries per day.It is one of the most visited sites in the world.It has yet to make money out of this traffic.Jay Leno’s joke about Facebook buying Twitter : It will create the biggest waste of time the world has ever seen. Old- style media readers are wedded to pen, paper and the printed word –none of these make sense to the users of the new media.

  • Factors Affecting Scheduling of Ads

    The following factors affect scheduling.

    Sales Pattern The sales pattern is to be studied carefully to identify the element of seasonality or absence of it. Vicks Pain Balm sells throughout the year, but there is surge during winter and monsoons. Some products are solely seasonal, e.g. Alphonso mangoes, rainwear, umbrellas, woollens.

    Purchase Cycle Some products are consumed throughout the month. Some find  consumption either at the beginning or end of the month. Smaller units may sell throughout the month, but family packs are bought at the beginning of the month.

    Budget Constraints We would like to outspend our competitors, but financial constraints prevent us from doing so. We should devise suitable scheduling keeping in mind the funds available.

    Product Availability Some products are heavily advertised. Costumers go to the retail counters and demand them. But on account of distribution problems, they are not available. The distribution problems must be sorted out first before further advertising activity is undertaken.

    Marketing Task Scheduling is largely influenced by the marketing task. While launching a product, heavy promotion is needed to penetrate the market.

    Competitive Activity We should match more or less our competitor in terms of promotion. This is competitive parity. We should consider our marketing muscle while deciding to mimic the competitor.

    Target Audience The demography of target audience influences our scheduling, e.g. whether our product is for males or females. If it is for female housewives, we will concentrate on afternoon TV shows.

    Receptivity Targeting Are the consumers in a proper frame of mind while receiving our message? Liquor ads are well-received in the evening. Biscuits are to be promoted for tea breaks. Pastes are advertised in the morning.

     

     

  • Creating Impact by Scheduling of the Ads

    Scheduling can be used to create impact.

    Roadblocks

    Here the ad is put on air across all channels simultaneously. It cannot be missed. It takes care of the habit of channel switching on the part of the consumer. It is a costly strategy.

    Day ( Day Part ) Emphasis

    Market followers follow this strategy. They are not expected to have the budget of the lead brands. A  specific day is chosen, or a day part. The advertising activity is  focused on these chosen days/day parts.Higher weights and  visibility are ensured as compared to competitors.

    Teasers

    Teaser ads are on air before the main ad and these have to create just interest in the main ad. They do not mention the brand as such Teasers in print can be in the same issue or successive issue . There is, however, a possibility that the consumer fails to connect the teaser to the main ad.

    Multiple Spotting

    The ad is repeated in the same break period. It arrests the attention of the target audience. It may compromise on overall reach delivery.

     

    Ad Responses

    How many exposures are enough to generate response to ads? Krugman talks of  three  exposures corresponding to curiosity, recognition and decision. A single exposure is not enough. Two exposures are effective three are optional.

    The response to advertising is sales or purchases. If ads are increased ( in other words frequency), the response shows an S-curve. The response increases at an increasing rate till the bend of the curve (inflection point) after which the increases are at a decreasing rate. The concept of Effective Frequency leads to flighting as a scheduling strategy.The later research work questioned the theory of three plus effective frequency. John Philips (1995) proposed the shelf-space model of recency. If a time period of a week is considered, a single ad is capable of generating a strong purchase effect. During the same week further exposures add very little to the effect. The response function follows a concave diminishing curve. The first exposure to the ad begins the effect. It increases at an increasing rate till a bump in the curve (inflection point) after which the increase is at a decreasing rate.

    Advertising has a task cut out. Remind the consumer when he is ready for the purchase. Since consumers buy everyday, presence, rather than frequency, counts. The maximum effect of advertising is when it is close to purchase. The attempt should be to maximize weekly reach at one plus. Recency is tantamount to continuity as a scheduling pattern.It works with an S-shaped response function too. Most FMCG brans have adopted recency as a scheduling option. Its success depends on the market conditions. In mature markets it is relevant. In India, perhaps flighting works better. All this is debatable.

    Ad stock

    Advertising recall is a function of the current advertising and previous advertising’s carry-over effect. Ad stock is s a measure of both these recalls. A fresh exposure enhances ad effect in terms of sales, brand preference or awareness. This is the response function or advertising wearing. The same effect wears out later depending on the content effectiveness, weight of the media plan, media used etc. The wear off is till the next exposure. This wear off is technically advertising decay. Ad stock is a model of communication build up and decay. Each message has its peculiar wear in and decay/wearout. The GRPs of each successive message are adjusted for the carry over effect of the previous exposures. In scheduling, the base GRPs and GRP-adjusted-for-decay are considered. Such adstock-adjusted-GRPs decline below a threshold level. It is then time to resume futher advertising activity. Such scheduling is pretty common. Still some people oppose it on the ground of recency. Recency prcludes any off-air time.Its basic premise is to have presence for as much time as possible.

  • Company Secretaries in Demand

    A company is managed by a Board of Directors, and is governed by the Companies Act. A secretary to the company is a link between the company and the outside world. He puts the company’s seal, and signs on behalf of the company on communications. He sees to it that the company complies with the provisions of the Companies Act. A secretary writes the minutes of the Board meeting. A secretary must be communicative enough to liaise with Board members and shareholders alike.

    A company secretary can report to the CEO. He could be given the status of Chief Operating Officer ( CXO ). Alternatively, he could report to the legal head or Chief Financial Officer ( CFO ).

    There are 40,000 practising company secretaries in India. In India, we have Institute of Company Secretaries of India which conducts the CS examination. It certifies around 3500-4000 students a year. Each large corporation requires at least 16-20 company secretaries. The talent pool is limited. This dearth of talent leads to poaching.

    Apart from working as secretaries, a CS qualified candidate can work as a CFO, if he has qualifications in finance, and additional qualification of CS. Even a legal head can have additional qualification of CS. Smaller firms have to CS, CFO and legal head, all combined into one.

    If a company secretaryworks as CXO, he gets a package of Rs. 1 to 1.5 crore. If he reports to CFO or legal head, he draws Rs 50 — Rs.80 per annum.

     

  • IBM — Big Blue Focuses on R & D

    IBM, also called Big Blue on account of its size and the colour of its logo and packaging, is a company with revenues of $ 92.7 billion. It spent a huge sum of $ 5.4 billion on R & D last year ( 2014-15 ). Over the last three years, it spent $ 17 billion. On an average, if spends 6 per cent of its revenues on R & D per annum. IBM has been issued more than 7500 patents in 2014, and it continues its patent registration lead over other US companies for the last 22 years in a line. Arvind Krishna is IBM’s global research head.

    Krishna manages 3000 researchers across a dozen locations in the world. Almost 2/3rd of these are Ph.DS. Some 300 researchers are devoted to mathematics. IBM has nurtured six Nobel laureates and as many Turing awardees in its 104-years history. It has 19 members from American Academy of Sciences, 23 members from the National Academy of Engineering, Fellows from IEEE and other top notch scientists.

    In India, BSE 100 companies spend 1.32 per cent of revenues on R & D. As the process patent in pharma was ended, and product patent was initiated in 2005 by changing the law, pharma has reached up to 10 per cent in research spending in search of the new molecules. Auto companies too have started using 2-3 per cent of turnover on R & D. In retail, R & D will be low, and in FMCG it is to the extent of 0.5 per cent. Indian IT companies are moving up the value chain, and this will lead to more spend on R & D.Infosys has started using 2.4 per cent on R&D and is setting a centre of research. As competition is now global, Indian CEOS will take research seriously.

  • Short Films

    Short films are a separate genre which require as much efforts and professionalism to make as feature films. People think that short films are just students films –they are made by media and film institute students as a part of their curriculum. Abroad, there is a separate slot on TV for telecasting short films. In the 1960s and 1970s, the Films Division used to telecast a lot of 20-30 minute short films on TV. In the last two decades, this format is on the decline, as many would like to produce feature films rather than short films.

    Clermont Ferrand is the world’s biggest short film festival. This genre should be taken seriously and should be recognised as art form. It is a format which is more serious than even feature films. Short give scope for a lot of experimentation which is not possible in a feature.

  • Protecting a Brand

    Brands are protected by a variety of laws –laws on copyrights, trademarks and other intellectual property considerations. If a brand becomes a common household word, it is a hazardous situation. As building a brand requires a heavy investment, it is necessary to make careful plans to protect it.

    Generic Brands

    A too powerful brand does not augur well for the company as it is likely to become generic, , and loses trade mark protection. Thus Nylon, Escalator, Aspirin and Cellophone have lost their brand character. Others like Xerox, Kleenex and Scotch are too close to  becoming generics.

    Infringement

    Registered brands get legal protection. Products are patented, and also get legal protection.Products are patented, and also get legal protection. Since brands are intellectual property, we should understand what infringement of intellectual property means.

    Trademarks

    Trademark protection is very common in most of the countries. They are words, names, symbols or icons used by creators and sellers of goods and services to identify them and to distinguish them from those made and sold by others.

    India has trade mark registration legislation. A trademark that merely describes a product category, say PC, cannot be protected. It must be a distinguishing symbol, say HP computers. A trademark that is similar to one already in use and that which likely to cause confusion or mistake cannot be protected by registration. Though trademark office makes its own search for finding such similarities, a company must perform its own search.

    Trade-mark laws give the owner exclusive rights to use the trademark. The owner can obtain injunctions against confusing trademarks used by infringers and can collect damages for infringement.

    A trademark registration can be challenged initially if there is another user who can prove its usage by him widely over a period of time.

    Copyright Law

    Brands are not protected by copyright laws, but these can be used to protect ads and package designs when trade mark protection is not available.A copyright owner has the following exclusive rights–

    • right to reproduce
    • right to distribute copies of the work
    • right to public performance
    • right to public display
    • right to modification

    If copyrights are violated, it is called infringement.

    Brand literature and manuals are protected by copyrights.

    The term of copyrights is the life of the  of the author plus 50 years. Copyright is generally owned by the person who created the work. However, if the work is created by an employee as a part of employment, the employer owns the copyright.

    Patents

    When inventions and processes are patented, it is called utility patents. When designs are protected, it is called design patents. A patent holder can exclude others from making, using or selling the patented invention/design during the term of the patent. Any breach without the permission of the patent holder is an infringement. Once an item goes off patent, it can be made, used and sold by anyone.

    Use of a Brand Name

    A brand name should be used just like a brand name.If we use it like a noun or verb, there is a danger of losing it ( we have to say, get the document photocopied, rather than get it xeroxed ). Once the brand name becomes generic, we will not be able to protect it. Even while choosing a brand name , a distinctive name should be chosen, rather than a name like Super Glue or Windsurfer which are difficult to protect.

    Litigation

    If someone appropriates the brand name to usurp its reputation, one has to fight in a court of law by engaging a competent trademark and patent attorney.

  • Distinction between Mainstream and Digital Journalism

    Mainstream media journalist is a pen and paper person, though he also uses modern gadgets whenever necessary.A digital media journalist works online.Mainstream journalist is not expected to know the production aspects whereas a digital fellow is savvy about the digital media.

    One very important distinction is the focus — a mainstream journalist has the language focus while framing the head line but the digital journalist focuses on key words, trending topics and ease of discovery for the user.In mainstream media, the articles are elaborate.Digital media has multi-media consumption.Here brevity is the name of the game.Some write ups are read on the screens smaller than five inches.

    Mainstream media can afford complicated expressions. Digital language is the everyday spoken language with commonly used phrases and idiom.In mainstream media, there is little or no feedback. Digital is used to feedback.

    Mainstream is attached to copy. It becomes inflexible at times.It becomes emotionally involved. Digital is detached from the copy — there are reality checks regularly.The approach is flexible. They are less emotionally involved.

    Mainstream is research-based. Digital has got to be instant — there is no luxury of time, and a page line-up changes several times.

    Im mainstream, there is less convergence of content whereas in digital there is convergence of content. Mainstream has vast infrastructure. Digital relies on power of speed and muli-media. They use engaging tools to hook the reader.In mainstream, there is less user-generated content. In digital, there is more user-generated content. They encourage citizen journalism.They are quick to assess the potential of the content.

    Mainstream is static and digital is dynamic.Stories are tweaked based on traffic ranking and search results.Mainstream is a literary indulgence and digital aims at user engagement.Mainstream is opinion generator and digital is opinion moderator. It is aggregator.

    Mainstream media is not so democratic but digital media is democratic.