Marketing Watch 2006
By Harish Bijoor
Time to save Marketing Year 2006 onto an old CD. Time to put it away as well. Store it out there in the Marketing archives of our time.
Time to therefore peek at the trends that shaped the year just gone by. Here is my take on the defining trends that made the year what it was.
Let’s trend-spot then….
Tele-marketing scaled new peaks of irritation: January 1, 2006. I was woken up in Boston at 4 am by Shilpa from Citibank who wanted to sell me a credit card. She had this “once in a life-time offer” for me and I was one of 100 lucky winners who would get a free credit card posted to me. All I had to say was a yes.
I screamed. I raved. I ranted. Shilpa warned me the call was being recorded.
Tele-marketing done by marketers which comprised a whole bunch of folk who represented products as close-knit as personal loans, car loans, home loans, and loans to pay off all other loans, pestered a hapless mass of consumers to irritation. I hear even Finance Minister P Chidambaram was not spared on his overseas trips. This is true-blue democracy at play!
The TRAI largely attempted little and the DNC registry was at best spoken of and left at that. At the end of the year, right now in December, President APJ Abdul Kalam has put his weight as well behind the cause of banning tele-marketing calls.
Tough days ahead for the tele-marketer hopefully. There will be a DNC registry, and possibly a high tariff on tele-marketing calls (a suggested Rs.1000 per call) which just might dissuade the tele-marketing call altogether.
The telemarketer will miss a whole big market of 185 million connections in India, projected to grow at 6million connections per month in all of 2007! And that makes it an exit volume of 257 million connected telephones in the country by the year end 2007.
Interactive Everything: Consumer boredom got handled reasonably well in 2006. The Interactive movement just about emerged.
It started with radio and television. The plethora of channels of both radio and television meant a more competitive programming structure for both mediums. In the beginning, all mediums just dish out fare that they devise by themselves. When things get competitive, channels then get interactive. 2006 saw a lot of this.
Every television channel got down to get the viewer involved. Programming that had viewers watching and then voting was big. The 'Nach Baliye' syndrome was here for good. And then comes news. Television channels actually got people to vote in rampantly for every issue there was to vote upon. The Jessica Lal trial, Prince and Budhia, the Nitish Katara murder trail, and tens of such causes were taken up. SMS revenue sharing deals were struck and television channels made money on a new revenue model at play.
Simultaneously with the revenue inflows due to participative viewership programmes, viewers felt happy. What a good combination this was! The viewer felt involved. Citizen journalists happened as well.
The interactive movement will not stop here in the years to come. It will move on. Interactive product development is a game to test and try. Make your consumers devise your product. Make your consumers make their own toothpaste the way they like it. At least make them feel they made it. Consumer product development! Consumer brand development! Interactive advertising! Interactive Branding! Interactive selling!
Modern Retail takes off but small is still beautiful: My friend Kishore Biyani calls himself a “Dukandar”. The 'Badshahs' of retail hogged the lime-light this year. “Dukandari” became an honorable profession to boot. The young Management Trainee who got selected by Reliance Retail went home excited this year. Even Grandma at home would not fret and say that her grandson who did this 2-year MBA program now works in a shop. Even Grandma looks at modern retail with a whole new perspective. Working in a shop is now a great thing to do.
Modern retail has arrived. The USD 280 Billion retail industry of India is all set to see aggregation of business. The medium sized retailer is set to perish by the road-side and the big retailer will gain. Your local ‘subzi-wallah’ now needs to compete with the corner Reliance Fresh outlet. Your 'subzi-wallah' will need to offer tomatoes at a standard price all through the year as a Reliance Retail will. Your 'subzi-wallah' will need to compete on hygiene, shopping experience, customer service and norms of glitz and glamour. Will he?
As all this happens, the micro retailer will continue to thrive. Your corner ‘kaka shop’ will thrive on the basis of location, low overheads and an overall yen to survive. The ’small is beautiful’ model will still be relevant to India. As modern retail arrives and thrives, we have a polarization of outlets then. At one end is the glitzy modern trade outlet. And at another, you have the small little micro-retailer. The 'pan-wallah' will continue to thrive in his business as well.
India is a nation of 12 million shops with a density of retail outlet population that stands at 12 outlets per 1000. This will largely thrive and survive.
Even the Promo-mindset changed: I have lived and thrived in a country where the consumer promotion is the ultimate salvation for sagging sales lines of the corporate organisation. Ever since the first promotion in the sixties of a stainless steel spoon on a Det detergent, the stainless steel spoon has remained the one-enduring item that every manufacturer of tea, coffee, soap, 'dal, cheeni, chawal and atta' doled out to the consumer.
We have offered spoons, combs, steel tumblers, mugs, and buckets as freebies for long enough. We are tired.
The year 2006 saw a definitive change in this trend. Marketers are experimenting with more. Traditionally, we have always offered a product with a product. A spoon with a packet of Tea. Now, we have a service being offered with a product. Pespsodent offered its buyers a coupon for a Café Coffee Day cup of coffee at any of its 370 and odd Cafes in the country. Shortly, expect to have a product offered with a service. Maybe a DVD player with a Television channel subscription? Or a free bottle of Oil to take home with every Body Massage at a spa? Travel First Class by Kingfisher Airlines and you will get a chauffeur driven car for a destination drop!
Colas join the Social Ostracism Categories: 2006 was a defining year for the Cola companies in India. India and the Indian at large appeared as connected to the world as any, when it came to issues of health and environment.
This had to happen. The James Bond movie today hits every Indian theatre whether it is in Hyderabad or Holenarsipura on the same day as it hits the multi-plexes in Houston and Halifax. The world is as seamless as it comes. Why then must not India awake and shout at everything the world is shouting about?
Pepsi and Coke faced their toughest year in India. The pesticide controversy rose to new heights. Kerala banned all of it and Karnataka banned it in its schools and hospitals. As the year ends, Karnataka has banned colas and is contemplating a full ban on junk food in schools and colleges and hospitals. Dr. Anbumani Ramadoss in Delhi is pleased as punch!
The food and drink category is progressively getting polarized into two segments. Junk food at one end and Real food at another. Junk food is getting the status of what I call a “social ostracism category”. Other social ostracism category products sitting higher on the sensitivity scale of the consumer at large are the Cigarettes, liquor, 'Gutkha' categories. Food now joins the lowest rungs of these. Junk food in particular and the Colas as a non-staple beverage. Junk food and junk drink, if you may call them that.
Cola companies have therefore looked outwardly brave and fought it all with marketing vigor and bravado. The year saw a Rajeev Bakshi starring in a commercial for Pepsi even. And Rajeev gave Aamir Khan a tough run for this money!
Simultaneously Cola companies have got inward looking at their base strategies. The companies are undoubtedly busy re-inventing their business models. Expect to see a lot of these embracing the “Real Food” and “Real Beverage” categories even. The Cola companies will have two verticals in their future businesses for sure. One will be on the side of the “Real” and the other on the side of “Junk”. Needless to say, both portions will thrive at different points of time. Time to hedge bets in the social ostracism categories at large.
Health and Wellness is sexy: Marketers of food and beverage have been plucking the low hanging fruit of consumer expectation, want, need, desire and aspiration for long. India is now entering into Phase 2 of its marketing era.
Phase 1 was really the early years from the Sixties on. The years when India showed a gradual craving for the product and service the whole wide world was consuming. This phase really reached its take-off stage in the early years of the 2000 series. Today, things are taking a wee bit of a turn.
Phase 2 of marketing era in India is just about beginning. 2006 showed the first signs of this trend. Consumers are waking up. Consumers connected to the developed world at large are waking up to concerns of health. Health as represented as offerings in the food and the beverage the consumer consumes. The Maggi ‘Atta’ noodles is here!
New categories are emerging. The sugar substitute has now matured. What used to be a sugar substitute in a small sachet for use in a cup of tea or coffee is now in a large jar for kitchen use. You might as well make even a 'Gajar Ka Halwa' with a branded sugar substitute in a bottle.
The movement is bound to cascade. Consumers are going to question the amount of sugar in a bottled drink, the amount of fat in a cup of cappuccino, and indeed the amount of fat in a portion of Kentucky Fried Chicken.
The trans-fats debate in the US is having its own impact in India. Sugar is an issue at debate. Oils of every kind will face scrutiny. So will fats. Every food and beverage player, whether in the product space or service space, will need to re-invent themselves for the future. As margarine rises, butter will face flak! And there will be a margarine in every category of food and beverage, waiting to offer itself as a salvation product or service.
Indian Innovation continued: Innovation, thy name is the Indian.
All of us have heard of the ‘Jugaad’ in Uttar Pradesh. All of us have heard of the Washing machines that make 'Lassis' at prosperous 'dhabhas' in Hoshiarpur.
The quest for innovation continued. The latest in the line up is the saree shop in Chennai, the Sri Kumaran Store. The store has launched a traditional sequinned saree with an innovation that is truly South Indian. The saree has a mobile-phone pocket! The saree with a mobile phone pocket, if you will! Technology meets tradition!
The 20 year old is actually 40: At the consumer end, the one big thing that happened in their lives was the complete down-aging syndrome of the Indian masses in the prosperous urban centers.
The man in the city is younger than the man in the village. The 50 year old started thinking like the forty year old and the forty year old thought he was all of 20.
Consumers are thinking younger, and in turn want to look younger as well. A whole range of cosmetic products will have a major run sooner than later.
When you devise a product or service in the future, watch out. Make sure that you devise it for people who are 20 and most certainly for all those people who are much older than that, but think they are 20!
Dotcom 2.0 starts making those early noises: The first rush of the Internet and business on the net ended up in a bubble burst all of us remember all too well. While Dotcom 1.0 was all about eye-balls, page-views and the dominance of the advertising model on the net. Dotcom 2.0 will be more solid. Promises to be.
The right gurgles are being heard as of now. 2006 saw the emergence of potent business models that had the Internet in India marrying the current requirement of the day to a very robust application led model of E-biz.
E-buzz is just about to happen then. Every Naukri.com is on a flourish mode as the job market in India booms over with the BPO, Technology, Bio-tech, Retail, Banking, Insurance and Real-estate sectors at the take-off stage. The Pure Internet play portals are doing a roaring business for sure.
Want to get married? Try the net. Want to buy an airplane ticket? Try the net. Want to do anything at all that can give you a pure Internet play experience, do it on the net. Just as long as the fulfillment process can be completed online, just do it.
As on June 2006, a Comscore Networks survey reveals a net using population in India (above the age of 15) standing at 18.02 million. Expect a quantum growth on this month on month. As the global online audience will rise by 2.7-3.0% month on month, expect an 8.5-9.5% growth rate in India. Quite in sync and match with the GDP growth rates on hand. India’s excitingly low broadband connect rates will help spur this on.
Hunger among the not-hungry: One last trend then. A negative one. A trend every marketer must be wary about. Worried about.
Marketers everywhere are guilty of causing hunger for products and services that consumers don’t necessarily need and want. This movement surged in leaps and bounds in 2006. The images a whole nation of consumers watched on television are essentially urban led images in a nation that has three fourths of its population living in rural areas. The hegemony of the urban rich continued to dominate the marketing agenda.
Hunger for inane products and equally inane services continued to be made in the advertising hot shops of the country. The prime goal behind all development remained the creative tone and tenor. Everything else was secondary.
The party-sparkles(“chamki” to the ‘desi’ at heart), hard-set hair gel and the scented panty-liner used advertising executions that excited a nation of consumers on the wall.
Marketers must therefore get ready to pay a ‘Guilt tax’ soon for all their errors of commission and indeed omission. Watch out!
On that note, wish you a very happy New Year 2007!
The author is a Brand-domain specialist and CEO, Harish Bijoor Consults Inc., a private-label consulting outfit with a presence in the markets of Hong Kong, UK, the Middle East and India.