consumer behavior
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SUB: CONSUMER BEHAVIOUR MAX MARKS: 100
Masters Program in Business Administration (MBA)
Note :- Solve any 4 Case Study
All Case Carry equal Marks.
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CASE I
Sunder Singh
Sunder Singh had studied only up to high school. He was 32-years of age, lived alone
in a rented room, and worked eight-hour shift at one petrol pump, then went to the
other one for another eight-hour shift. He had a girl friend and was planning to marry.
One day when he returned from work, he got a note from his girl friend that
she was getting married to someone else and he need not bother her. This was a
terrible shock to Sunder Singh and he fell apart. He stopped going to work, spent
sleepless nights, and was very depressed. After a month, he was running Iowan his
savings and approached his earlier employers to get back his job, but they would not
give him a second chance. He had to quit his rented room, and sold few things that
he had. He would do some odd jobs at the railway station or the bus terminal.
One day, nearly two years ago, he was very hungry and did not have any
money and saw a young man selling newspapers. He asked him what he was selling
and he told him about Guzara (an independent, non-profit, independent newspaper
sold by the homeless, and economically disadvantaged men and women of this metro
city). Sunder Singh approached the office and started selling the newspaper. He did
not make a lot of money, but was good at saving it. He started saving money for a
warm jacket for next winter.
He was reasonably happy; he had money to buy food, and no longer homeless
and shared a room with two others. One day, with his savings he bought a pair of
second-hand Nike shoes from flea market.
Sunder Singh is not unique among low-income consumers, especially in large
cities, in wanting and buying Nike shoes. Some experts believe that low-income
consumers too want the same products and service that other consumers want.
The working poor are forced to spend a disproportionate percent of their
income on food, housing, utilities, and healthcare. They solely rely on public
transportation, spend very little on entertainment of any kind, and have no security of
any kind. Their fight is mainly day-to-day survival.
QUESTIONS
1. What does the purchase of a product like Nike mean to Sunder Singh?
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2. What does the story say about our society and the impact of marketing
on consumer behavior?
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CASE II
Key to Buyers' Minds
Consumer buying research has turned a new leaf in India. The era of demographics
seems to be on the backbench. Now, Marketing Research people are less likely to first
ask you about your age, income, and education etc. Instead, there is a distinct shift
towards inquiries about attitudes, interests, lifestyles, and behaviour - in short
towards a study of consumers' minds called psychographics.
Pathfinders, the marketing research wing of Lintas, occasionally came out with
its highly respected "Study on Nation's Attitudes and Psychographics
(P:SNAP). The first in this series was released in 1987 with an objective to develop a
database of lifestyles and psychographics information on the modem Indian women.
The second was in 1993, and the third in 1998. Pathfinders choose woman for the
study because of the belief that more often than not, in urban areas, it is the woman
who makes buying decision.
The Pathfinders' study involves interviewing over 10,000 women over the
entire country and segmenting them in clusters according to their beliefs, attitudes,
lifestyles, and lastly their demographics profile. The idea is to identify groups of
consumers with similar lifestyles who are likely to behave towards products or
services.
For advertisers and advertising agencies, this profile helps enormously. For
example, an advertiser may want to give a westernised touch to a commercial. The
profile of the target customer, as revealed by this study, tells the advertising people
the perimeter within which she/he must stay, otherwise the ad may become an
exaggerated version of westernised India.
For the purpose of this study, Pathfinders divided the Indian women in 8
distinct cluster of varying values and lifestyles. Figures from two studies are available
publicly and are given below:
Cluster 1987 (%) 1993 (%)
Troubled homebody 15.9 18.3
Tight-fisted traditionalist 14.8 10.0
Contended conservative 7.0 9.3
Archetypal provider 13.0 8.8
Anxious rebel 14.1 15.8
Contemporary housewife 19.2 22.1
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Gregarious hedonist 8.7 6.6
Affluent sophisticate 7.3 9.1
The studies seek to track the macro level changes and movements within
these 8 clusters in a period of time.
We note from the table that in 1987, 8.7% of the women could be classified as
"gregarious hedonist" - those who consider their own pleasure to be supreme in life.
'In 1993, this figure fell to 6.6%. The "troubled homebody" segment - those with large
families and low-income, increased from 15.9% in 1987 to 18.3% in 1993.
Information, such as this, is obviously useful to assess the collective mood.
That's why Pathfinders have an impressive list of clients fort heir P:SNAP, which
includes Hindustan Lever, Cadbury, Johnson and Johnson, and Gillette.
SOME PSYCHOGRAPHICS PROFILES OF INDIAN WOMEN
Rama Devi, the Contended Conservative
The lady lives a 'good' life - she is a devoted wife, a dotting mother of two school-
going sons, and a God fearing housewife. She has been living her life by the
traditional values she cherishes - getting up at the crack of dawn, getting the house
cleaned up, having the breakfast of 'Aloo Parathas' ready in time before the children's
school-bus honks its horn, laying down the dress her 'government servant' husband
will put on after his bath, and doing her daily one-hour Puja. She fasts every Monday
for the welfare of her family, looks at the 'freely mixing' and 'sexually liberal'
youngsters with deep disdain and cannot understand the modem young woman' s
19reed' for money, jewellery, and jobs.
Her one abiding interest outside the household is the Ganesh Mandir that she
has visited every Wednesday, ever since she got married. She lacks higher education
and hence has little appreciation for the arts, the literature, and the sciences. Her
ample spare time is spent watching the TV, which is her prime source of
entertainment and information.
Shobha, the Troubled Homebody
Shobha married young to the first person she fell in love with, Prakash. Four children
came quickly before she was quite ready to raise a family. Now, she is unhappy. She
is having trouble in making ends meet on her husband's salary who is employed as
clerk in a private business and is often required to work up to late hours. She is
frustrated, as her desire for an idyllic life has turned sour. She could not get
education beyond high school and hence there are hardly any job opportunities for
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her. Her husband also keeps on complaining of the long hours of backbreaking work
he has to put in. He consumes country-made liquor routinely.
Shobha finds escape in Black and White TV soap operas and films that
transport her into the world of her dreams. She watches TV almost all through the
day and her children roam around in the locality streets and cannot expect any help
from their' ever-grumbling' mother. Purchases are mostly limited to 'essentials' and
any discretionary purchases are postponed till it becomes possible.
Neeru, the Archetypal Provider
Neeru epitomises simplicity. Her life is untangled. It runs on a set timetable with
almost clockwork precision. She works as a primary school teacher in a rural
government school about 50 kilometers from her district town residence. She is
married to a social worker in an NGO whose income is erratic. Her three children, two
teenaged sons and l0-year old daughter are getting school education.
The day begins with the lady getting up before anybody else and finishing the
household chores as fast as she can. There is no room for delay as the State
government 'Express' bus, on which she ravels to her school will be at the bus stop
across the road precisely at 8.00 A.M. If she misses that, the next ordinary bus comes
at 11.15 A.M, quite useless as it will reach her school only at 1.00 P.M. The school
closes at 2.00 P.M. There are private Jeeps running sporadically, but the fare is high
and Neeru does not believe in wasting hard earned money. Besides, she travels on
husband's 'free pass'. Neeru prides herself on her monthly savings ofRs.1000 for the
last many years. The money will go toward the wedding of her daughter.
Vandana, the tight-fisted traditionalist
For Vandana, saving money is 'in-born' discipline. When she was young and
unmarried, she remembers her mother was extremely tight-fisted and ran the
household in under Rs.800 per month. It was the necessity of those times as her
father retired at a princely salary of Rs.1800 per month. All through her childhood,
she saw deprivation and hardship. She would not join the annual class picnic in her
school days as it meant' avoidable expenditure'.
Now she is married and mother of two school going children. The husband
works in a bank as a clerk. He has taken all the loans that he could from the bank and
invested the money in real estate. As a result of monthly deductions toward
repayment of loans, his take home salary is now very little. But Vandana can manage.
The school dresses are sewn by her at home, the stationary required comes from a
wholesale market, and the books are second-hand from 'friends', cultivated for the
purpose. On birthdays, Vandana prepares a sweet dish at home and they spend on a
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film. There is a cow and calf at home, being kept as a source of revenue and milk.
She sells half the milk to a neighbour and the family consumes the rest. Life in
general is hard and frugal. There is a colour TV at home, but they disconnected the
cable connection ever since the rates went up. Now they watch Doordarshan only.
Aditi, the Anxious Rebel
Daughter of a Freedom Fighter, Aditi has always fought her values and principles.
People still remember when she walked out of the exam half in a huff as a mark of
protest against mass cheating' sanctioned' by the centre superintendent in a tough
paper. While every body else passed with high marks, Aditi failed.
Even though she repeated the paper, Aditi never learned to swim along the
flow. She always swam against the current. She joined the Communist Party in her
college and gave rousing speeches against the teachers and authorities. This resulted
in her getting very poor marks and left her jobless.
Later, Aditi joined an NGO and now works on social issues. She says she is a
creature of the mind, not materialism. Her favourite dress is a long flowing Kurta, and
slacks. She wears loosened hair and chappals. She reads voraciously. Financially, she
is independent and lives with her parents. Her disdain for the institution of marriage
and contempt for the modern Indian male keep her single and unattached. She will
continue-to be so as she prefers this status, but may adopt a baby later in life.
Reema, the Gregarious Hedonist
Just 19, and Reema is already divorced. Her father is a wealthy businessman. During
Reema's childhood, her father was mostly away in Dubai and Africa, trying to amass a
fortune. That he did but he lost on his chance to be a good father. Both his children
started feeling like' orphans' after their mother got involved with another man.
Reema was ever longing for her family when alone came Harsh, her private
high school tuition teacher. Harsh was all of 22 and very caring. He was tall,
handsome, and very popular in school and many girls had a crush on him. Reema was
sixteen then and a great fan of Harsh. For her, Harsh was a prize catch as he
combined the loving qualities of a father with a mix of being a good teacher. She was
soon dazzled and surrendered in a physical relationship.
Marriage followed. She never understood how Harsh changed overnight from a
caring father figure to a demanding husband. And she could never cope with the six
hours she had to spend in the kitchen everyday. Why should she do the cooking, she
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asked Harsh, as it was something that the 'Ayas' did? The reality of a humdrum
middle-class existence hit her hard and she soon walked out of 'the hell'.
Her father understood her need to recover and made her allowance rather
generous. He bought her a Red Sports Car and got her an admission in a private
college.
College is entertainment for her. She attends college only on days when there
is some function like a cultural evening or the sports meet. Now, Reema spends on
alcohol, dresses, parties, and holidays. She consumes a mood elevating drug every
evening and keeps sending SMS messages on her mobile to her friends all through
the night. For her, life means 'buying pleasure endlessly'.
Shruti, the Contemporary Housewife
Shruti is an urbane woman. She is well educated and genteel. She is an officer in a
national bank, and active in her club affairs and community activities. Socialising is
an important part of her life. She is a doer, interested in watching cricket, politics,
and current affairs. Her life is hectic as she has a lot to do for home and office
everyday. Still she often enjoys viewing movies on TV every week.
Shruti shops for Sarees, jewellery, and cosmetics for herself on a regular basis.
However, family needs come before her own needs. Her home is a double income
household and she has one kid. All the modern gadgets are present and the standard
of living is upper middle-class.
Momeeta, the Affluent Sophisticate
Momeeta was born Mamta, but elevated herself to Momeeta after marriage to a
business tycoon. Momeeta is an elegant woman with style. She lives in Mumbai
because that is where she wants to be. She likes the economic and social aspects of
big city living and takes advantage of her' contacts'. She has built up friendship and
cultivated the city bigwigs by inviting them to the numerous parties she throws in her
luxurious penthouse.
Momeeta is a self-confident, on-the-go woman, and not a homebody. She is
fashion conscious and clothes herself in the latest designer dresses. Even at 40, she
can carry off a mini with aplomb. She is financial very secure and hence does not
shop with care. She shops for quality, exclusivity, and the brand name, not the price.
She frequently travels abroad, buys expensive gifts for friends, and has an
international understanding on what is "chic" at the moment.
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Three psychographics profiles of Indian women and their food shopping habits:
Type I Type II Type III
Money conscious Careful shopper Gourmet/satisfaction
Food shopping is done on necessity and is postponed as long as possible.
Makes out shopping lists and makes weekly/ monthly purchases.
General liking for food shopping and food related activities.
Minimum amount of money spent. This is enabled through comparative evaluation of many shops, even if it takes more time.
Can purchase larger quantities if there is an incentive like lower prices or a gift scheme. Food budget is flexible.
Collects and files food recipes. Experiments with new food products and methods of cooking. Likes to exhibit her culinary skills to her friends and family.
Operates within the food budget. Does not buy larger quantities to save money.
Checks labelling for price, nutrition and expiry date information
Spends a lot of time in kitchen as preparing food is an enjoyable activity.
Price and immediate outflow of cash is the dominant purchase concern.
Goes for tried and trusted brands even if they cost a little more. This is an important purchase concern.
Food items are bought either based on the past satisfaction from them or for their novelty value. Unknown food items are purchased if they excite the senses. This is the dominant purchase concern.
Who fits in where?
Shobha, Neeru, and Vandana,
Shruti, Aditi, and
Rama Devi
Momeeta (she is a food lover).
(Prof Deepak Khanna, colleague, has developed these profiles based on his
perceptions of certain personality types).
QUESTIONS
1. Explain how the above-mentioned information is likely to benefit a
marketer?
2. Which of the above mentioned types are likely to respond to sales
promotion? Explain.
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3. A manufacturer of personal care products in the premium segment
starts frequent sales promotions. What is likely to be the impact on the
above-mentioned types?
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Case III
Star Airways
Star Airways offered passengers air services within the country and served a territory
of 18, 000 sq. miles with an expanding population of over 70 lakh of people who are
potential users of the airline services. The geographic diversity and scattered
business and commercial cities have led to steady increase in the number of people
who use air travel. The clientele includes business people, as well as individuals on
non-business trips, holidays, and leisure trips etc. As a result, the passenger traffic
had been increasing steadily since the firm started operations in 1983. In the last
three years, however, the growth has not been consistent with the growth pattern
showed by the company in the last fifteen years - as against a healthy growth of 13
per cent, the sales have marginally improved, registering a growth of 6 per cent.
The company's early success was due to the pioneering concepts used by it in
the airline industry, which was dominated by large private and government operators
with little market orientation. The launch of the company's services coincided with a
boom in the aviation sector and reduced government dominance, which opened up
the skies for private operators. Besides this, the company offered a host of
innovations in the customer service functions such as smaller and newer planes,
convenient schedules, free gifts, comfortable seats, exclusive terminals, express
baggage-check, and airport-to hotel transit for its first and business class clients. In
turn the fares charged by the company were premium in the category and almost 15
per cent higher than the industry average. The company president in the following
words justified this move: ''We are selling entirely on the basis of providing quality
experience to our clients. Our services, ambience, and commitment to safety and
time-bound schedule, all surpass the standards of the industry."
During the first ten years of operations the company faced no direct
competition. The only problems faced by the marketing staff were (a) the price, (2)
the need to convince clients that air service was more efficient than other
alternatives, (c) identifying the customers, and more importantly (d) developing the
image of a dependable service. The consumers, who till now were forced to put up
indifferent service offered by large government operators, did not offer much
resistance and were agreeable to try out new company. Once customers were
convinced, retaining them was very easy. Hence the company enjoyed immense
loyalty from its clients with almost 40 per cent of them being regular users. Sales
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were handled by the sales division as well as by some independent sales
representatives.
In early 1990s the company faced direct competition for the first time with a
new company coming up with smaller planes and all other advantages which were
previously associated with Star Airways. The growing business had made the market
very lucrative and hence in the next three years, four major competitors were also
vying for the market share. The company slowly lost to these competitors and could
manage to retain only 30 per cent of market share by the end of 1994. All the
competitors were engaged in aggressive promotion and soon started a 'price war' in
order to outdo one another. For the next six months, each of them offered big
discounts and gifts (such as TV / audio systems) with the return ticket on different
routes. The most profitable and commercia1ly viable routes were the major targets of
these price related competitions. The consumer was the ultimate beneficiary and in
short time, the companies started facing losses due to this price-cutting.
Star Airways had so far remained out of this ‘price-war’ and lost its market
share on the competitive routes very rapidly. It was able to retain the clients on
other routes, which were not a part of this intense competition. Unhappy an anxious
about this state of affairs, the company vice president, marketing, developed a
marketing plan with several components. The initial part of the plan consisted of a
market research done on a cross-section of existing clients as well as the clients of
competitors and the following observations were made :
Star Airways was considered a quality-oriented company but many felt that it
was getting stodgy.
The satisfaction with crew and schedules had declined over the last 5 years
amongst regular customers.
The clients felt that the airline was losing its edge over customer service
because it was nonflexible.
The prices offered by competitors are less and they provide only a fraction of
services offered by Star Airways. This was the main reason of clients switching
over to competitors. As many as 70 per cent respondents considered the costs
as the most important factor in deciding on the airline.
Some deciding factors and their relative importance to clients were found to be
following this pattern.
Feature offered by
airline
Importance of feature
as the deciding factor
Rank of feature in decision
making influence
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Price 67% 1
Ambience and food 9% 3
Punctuality 14% 2
Services & convenience 7% 4
Free gifts etc. 3% 5
The second phase of the plan included a massive advertising and promotion
plan. The VP marketing, Anil Saxena, felt that the company needed to advertise it's
dedication to quality and rebuild an image of being a customer-oriented airline. He
began discussions with the advertising agency to launch a campaign in the near
future.
After a month, the agency came out with the following recommendations:
The campaign is to be completed in four months time and the budget will be
351akh.
The company would reach 85% of target audience, once in a month by direct
mail.
Four times a month a TV commercial will be aired on a business show time. The
audience TRP is consistent and highest in this category of shows.
Star Airways would build the campaign theme around 'quality and customer
service initiatives' .
The direct mail letter would be sent to a database of 85,000 clients in four
months. The letter will contain information on the airline and again stress on
the same theme of' quality and customer service'.
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QUESTIONS
1. What is likely to be the decision process in case of choosing an airline?
2. Would this plan suggested by the vice president help in convincing the
customers to use Star Airways? Give your reasons.
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Case IV
Mouse-Rid
One hot May morning, Shobha, general manager of Innotrap India Ltd., entered her
office in Delhi. She paused for a moment to contemplate the quote, which she had
framed and hung on a wall facing her table.
"If a man can make a better mousetrap than his neighbour, the world will
make a beaten path to his door." She vaguely recalled that probably it was Ralph
Waldo Emerson who said this. Perhaps, she wondered, Emerson knew something that
she didn't. She had the better mousetrap - Mouse-Rid - but the world didn't seem all
that excited about it.
Shobha had just returned from a Trade Fair in Kolkata. Standing in the trade
show display booth for long hours and answering the same questions hundreds of
times had been tiring. Yet, this show had excited her. The Trade Fair officials held a
contest to select the best new product introduced at the show. Of the more than 150
new products, her mousetrap had won first place. Two women's magazines had
written small articles about this innovative mousetrap, however, the expected
demand for the trap had not materialised. Shobha hoped that this award might
stimulate increased interest and sales.
A group of investors who had obtained rights to market this innovative
mousetrap in India had formed Innotrap India in January 2001. In return for marketing
rights, the group agreed to pay the inventor and patent holder, a retired engineer, a
royalty fee for each trap sold. The group then appointed Shobha as the general
manager to develop and manage Innotrap India Ltd.
The Mouse-Rid, a simple yet clever device, is manufactured by a plastics firm
under contract with Innotrap India Ltd. It consists of a square, plastic tube measuring
about 6 inches long and one and one-half inches- square. The tube bends in the
middle at a 30-degree angle, so that when the front part of the tube rests on a flat
surface, the other end is elevated. The elevated end holds a removable cap into
which the user places bait (piece of bread, or some other titbit). A hinged door is
attached to the front endofthe tube. When the trap is "open", this door rests on two
narrow "stills" attached to the two bottom corners of the door.
The trap works with simple efficiency. A mouse, smelling the bait enters the
tube through the open end. As it moves up the angled bottom toward the bait, its
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weight makes the elevated end of the trap drop downward. This elevates the open
end, allowing the hinged door to swing closed, trapping the mouse. Small teeth on
the ends of stills catch in a groove on the bottom of the trap, locking the door closed.
The mouse can be disposed of live, or it can be left alone for a few hours to suffocate
in the trap.
Shobha felt the trap had many advantages for the consumer when compared
with traditional spring-loaded traps or poisons. Consumers can use it safely and easily
with no risk for catching their fingers while loading. It poses no injury or poisoning
threat to children or pets.
Shobha's personal and informal inquiries with acquaintances and friends
suggested that women are the best target market for the Mouse-Rid. Most women
stay at home and take care of household chores and their children. Thus, they want a
means of dealing with the mouse problem that avoids any kind of risks. To reach this
market,
Shobha decided to distribute Mouse-Rid through grocery stores, and
kitchenware stores. She personally contacted a supermarket and some departmental
stores to persuade them to carry the product, but they refused saying that they did
not sell such contraptions. She avoided any wholesalers and other middlemen.
The traps were packaged in a simple cardboard, with a suggested retail price
ofRs.150 for a piece. Although this price made Mouse-Rid about five 1;0 six times
more expensive than standard traps, those who bought it showed little price
resistance.
To promote the product, Shobha had budgeted approximately Rs. 300,000
toward advertising in different women's magazines, such as Grah Shobha, and Good
Housekeeping. Shobha was the company's only salesperson, but planed to employ
sales people soon.
Shobha had forecasted Mouse-Rid's first year sales at 2 million units. Through
Aril, however, the company had sold only few thousand units. She wondered if most
new products got to such slow start, or if she was doing something wrong.
Shobha knew that the investor group believed that Innotrap India Ltd. had a
"once-in-a lifetime chance" with its innovative mousetrap. She sensed the group's
impatience. To keep the investors happy, the company needed to sell enough traps
to cover costs and make a profit.
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QUESTIONS
1. Has Shobha identified the best target market for Mouse-Rid? Why or
why not?
2. Does Shobha have enough needed data on consumer behaviour? What
type of consumer research should Shobha conduct?
3. What type of advertising can influence consumers for this type of
product?
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Case V
Golden Glow Soap
Anil Mahajan absent -mindedly ran his finger over the cake of soap before him. He
traced the name 'Golden Glow' embossed on the soap as he inhaled its unmistakable
sesame fragrance. It was a small soap, almost like a bar of gold. There were no frills,
no coloured packaging, and no fancy shape. Just a golden glow and the fragrance of
sesame and Lucida font that quietly stated' Golden Glow'.
Mahajan smiled wanly and clasped the soap in his hands, as if protecting it
from an unseen predator. He was wondering with quiet concern if the 30-year-old
brand would last long. Sensi India, where Mahajan was marketing manager, was
taking a long, hard look at the soap, as it was proving to be a strain on resources.
There were varying stories about how Golden Glow was launched. Some said
the brand was a 'gift' from the departing English parent company. Others claimed
that it was created for the then chairman's British wife, as the Indian climate did not
agree with her skin. They also claimed that the lady also coined the copy "The honest
soap that loves your skin" was also coined by the lady. The line had stuck through
three decades. Only the visuals had changed, with newer models replacing the older
ones.
Zeni was basically a speciality products company producing household
hygiene, fabricare, and dental care products. Golden Glow was the only soap in its
product mix, produced and marketed by Sensi. Its reliable quality and value delivery
had earned it a lot of respect in the market. Golden Glow equity was such that Sensi
was known as the Golden Glow Company. Indeed, the brand name Golden Glow
denoted purity, reliability, and gentle skincare.
In 1994, Sensi UK increased its stake in the Indian subsidiary to 51%. Within
months, all of Sensi's products were given a facelift, thanks to the inflow of foreign
capital. New packaging, new fragrances, new formulations and more variants were
introduced.
Only Golden Glow was left untouched. For, although it had a growing skincare
business following some strategic acquisitions in Europe in the early eighties, Sensi
UK was not a soap company. The UK marketing team ran an audit of every brand and
product in the company's portfolio. But when it came to Golden Glow, it faltered. "We
don't know this one," officials at the parent company said.
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"We don't want this one to be touched," Mahajan had said protectively, a
sentiment tliat was endorsed by the managing director, Rajan Sharma. "Golden Glow
is too sacred, we will leave it as it is," he said.
But the UK marketing team was confounded. What was a lone soap doing in
the midst of toilet cleaners and fabric protectors; they wondered, however they
somehow agreed that their proposed revamp strategy would only look at up-
gradation, not tinkering with what wasn't broken.
Indeed, for 30 long years no one had tampered with the Golden Glow brand.
And Mahajan felt there was no reason to start now. Golden Glow, in his view, was a
self-sustaining brand. That was a bit of an understatement because advertising for
the brand was moderate and Sensi India had never used any promotional gimmick for
it.
Now, after four years of nurturing the other categories, Sensi UK had decided
to launch its Vio range of skincare products in India. But Golden Glow's presence and
profile was a major roadblock to Vio's success. "It will create dissonance, confuse our
skincare equity and deter the articulation of Vio's credo. It will stand out as a genetic
flaw," argued the UK marketing head. "You need to do a rethink on Golden Glow."
Mahajan protested. "Why? It has such a strong equity and loyal following. So
much has been invested in it all these years. Why give up all that?"
Rajan, however, had another idea. "Let us then extend the Golden Glow
brand." He said It was the simplest solution. Companies were now investing heavily in
creating new equities for their brands. But in Golden Glow's case, Sensi was already
sitting on a brand with a terrific equity. He felt that extending this equity to other
categories, such as skincare products would be successful.
But Golden Glow needed a new positioning before it could be extended. Till a
few years ago, it had been in premium category, priced at Rs.15. Then new brands
with specific positioning and higher price tags entered the market. This created a
level above Rs.15 soaps and pushed Golden Glow down to the mid-priced range. So
Golden Glow's price was not commensurate with its premium position and image.
Over the years, Golden Glow had become so sacred that Sensi India had been
too scared to do anything to it. As a result, the soap was left with niche category of
loyal users. This category neither shrank or increased, just kept getting older and
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older, and with it the brand also kept growing older. For example, when Mahajan's
wife had her first baby at 25, her mother had recommended Golden Glow for her dry
skin and also for baby's tender skin because it contained sesame oil. That was in
1979. Today, Mahajan's daughter had turned 21 and was being wooed by Dove,
Camay, even Santoor, and Lifebuoy Gold, with their aggressive advertising. Golden
Glow had begun to lose its image of being contemporary as newer brands came in
with newer values.
Today, at 46, Mahajan's wife still used Golden Glow, but when she
recommended Golden Glow to her daughter, she said, "But Golden Glow is a soap for
mothers, for older people."
That was a major problem. The Golden Glow brand had aged, and Sensi India
hadn't even been aware of it. While its equity had grown with its users, its personality
had aged considerably in the last 30 years. "I don't think you can keep the personality
young, unless you keep renewing the brand. The objective now is to widen your
equity so that your image becomes young," continued Rajan. "For instance, if today
you were to personify a Golden Glow user now, it would be a woman of 45 years
using the same brand for many years, who is aver-se to experimenting, very skincare
conscious, very trusting, and very one-dimensional. As you can see, this is not a very
competitive personality. These are the strengths of our Golden Glow, but these are
also its weaknesses," he analysed.
The context had changed. Today, youth demanded brands that stood for
freedom and fearlessness. They demanded bold brands that dared to cure, not just
p;eserve. "Preservation is for old people. Those are the attributes being presented in
evolved markets," said Rajan. To make Golden Glow contemporary, the attributes had
to be re-framed, he felt. "You can't make a young brand trusting caring, loving,
without adding other attributes to it. Today, youth stands for freedom, for laughter,
for frankness, for forthrightness. That's what Close Up, Lifebuoy Gold, Vatika, and
other brands propagate. So, either come clean and say it is for older skin which needs
trust and kindness, or reposition the brand," said Rajan.
Repositioning was also necessary to address another anomaly in Golden
Glow's image: its perceived premium. Sensi India had been unable to do anything
about Golden Glow slipping into the mid-price range following the entry of more
expensive brands. Now, as Rajan mulled over the brand extension plan, Mahajan felt
that Golden Glow's premium positioning was its core equity and that had to be
maintained.
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"If you are premium priced in the consumer's mind, your extensions are
automatically perceived as premium. So, if you don't present the other products as
premium, the consumer will not see them as extensions of the brand," he said. "For
example, if you are to launch a shampoo which is priced lower than Sunsilk, but
higher than Nyle and Ayur, then whatever the rationale, the consumer will not accept
your product. "It is not the Golden Glow I know," will be the feeling," he said.
Mahajan felt that since premium positioning was one of Golden Glow's equity
values, it would be very difficult to convince consumers that the brand was being
extended without hanging on to this particular value. "Will they buy your rationale
that the very same values and equity would now be available at a low price? To be in
the premium segment now, you have to price it at Rs 35 or 40, almost on a par with
Dove," he said. "With Dove retailing at Rs 45, Golden Glow will be perceived as a
cheaper option."
"We can't simply raise the price," said Rajan. "What are we offering for that
increase? You can 't add value because you don't want to tamper with the brand. The
consumers will then ask, "Golden Glow used to be so cheap, what has happened
now? The user will forget that 15 years ago, Rsl0 was expensive, because all her
comparisons would be in today' s context," said Rajan.
"So what's the option?" asked Mahajan. "You don't have to be expensive to be
premium," said Rajan. Golden Glow already has the image of a premium brand,
thanks to its time-tested core values of purity, credibility, and reliability. What we can
do is reinforce the premium through communication and positioning. In fact) we
should have tinkered with Golden Glow long ago. That is what HLL did with Lux. It
also launched a bridge brand, Lux International, in the premium category," said
Rajan.
"How could we have done anything to the brand?" asked Mahajan. "The
product had such a strong following. It stood for gold, for sesame oil, for its subtle
earthy perfume. We changed the packaging periodically, but that's all we could do.
Remember the time we brought out a transparent green Golden Glow with the
fragrance of lime? It bombed in the market."
Rajan was not in favour of the premium positioning. It appeared very short
sighted to him, given the bigger plan to extend the brand. "Where are the volumes in
the premium segment? He asked. "For some reason, every manufacturer feels that
skincare can be an indulgence of only the moneyed class. As a result, there is a
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crowd in the premium end of the market. Do we want to be yet another player in the
segment?"
Fifteen years ago, Golden Glow was perceived as a premium product. But
today, globa1brands like Revlon, Coty, and Oriflame were delivering specific premium
platforms. Golden Glow did not have a global equity. 'Let us revisit the brand and
examine what it stood for 15 years ago and examine the relevance of those attributes
in today's context," suggested Rajan. "Golden Glow stood for care, consciousness,
love, quality and all that. But today, are these enough to justify a premium position?"
he asked Mahajan. "These attributes are viable in the mid-priced segment." He said.
"The mid-priced brand is the proverbial washer-man's dog," said Mahajan.
"You don't know whether you are at the bottom end of the premium range or at the
top-end of the low-priced range. You end up creating an image of being on the
opportunity fence. It is a mere pricing ploy, with no strategic value."
QUESTIONS
1. Discuss the nature of problem(s) in this case?
2. Suggest the kind of consumer research needed?
3. How should Golden Glow be positioned/ repositioned to bring about the
desired change among consumers? Give your reasons.
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CASE VI
Impact of Retail Promotions on Consumers
Shoppers' Delight, a large retail store, had above-average quality and competitive
prices. It advertised its retail promotions in local newspapers. Its TV advertising was
mainly aimed at building store image and did not address retail promotions. The
management knew it well that they had to advertise their retail promotions more, but
they did not feel comfortable with the effectiveness of present efforts and wanted to
better understand the impact of their present promotions.
To better understand the effectiveness of present efforts, a study of
advertising exposure, interpretation, and purchases was undertaken. Researchers
conducted 50 in-depth interviews with customers of the store's target market to
determine the appropriate product mix, price, ad copy and media for the test. In
addition, the store's image and that of its two competitors were measured.
Based on the research findings, different product lines that would appeal to
the target customers were selected. The retail promotion was run for a full week. Full-
page advertisements were released each day in the two local Hindi newspapers, and
also in one English newspaper that devotes six pages to the coverage of the state.
Each evening, a sample of 100 target market customers were interviewed by
telephone as follows:
1. Target customers were asked if they had read the newspaper that day. This was
done to determine their exposure to advertisement.
2. After a general description of the product lines, the respondents were asked to
recall any related retail advertisements they had seen or read.
3, If the respondents were able to recall, they were asked to describe the ad, the
promoted products, sale prices, and the name of the sponsoring store.
4. If the respondents were accurate in their ad interpretation, they were asked to
express their intentions to purchase.
5. Respondents were also asked for suggestions to be incorporated in future
promotions targeted at this consumer segment.
Immediately after the close of promotion, 500 target market customers were
surveyed to determine what percentage of the target market actually purchased the
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promoted products. It also determined which sources of information influenced them
in their decision to purchase and the amount of their purchase.
Results of the study showed that ad exposure was 75 per cent and ad
awareness level was 68 per cent and was considered as high. Only 43 percent
respondents exposed to and aware of the ad copy could accurately recall important
details, such as the name of the store promoting the retail sale. Just 43 per cent
correct interpretation was considered as low. Of those who could accurately interpret
the ad copy, 32 per cent said they intended to respond by purchasing the advertised·
products ' and 68per cent sad they had no intention to buy. This yields an overall
intention to buy of 7 per cent. The largest area of lost opportunity was due to those
who did not accurately interpret the ad copy.
The post-promotion survey indicated that only 4.2 per cent of the target market
customers made purchases of the promoted products during the promotion period. In
terms of how the buyers learned of the promotion, 46 per cent mentioned newspaper
A (Hindi), 27 per cent newspaper B (Hindi), 8 per cent newspaper (English), and 15
per cent learned about sale through word-of mouth communication.
The retail promotion was judged as successful in many ways, besides yielding
sales worth
Rs 900,000. However, management was concerned about not achieving a
higher level of ad comprehension, missing a significant sales opportunity: It was
believed that a better ad would have at least 75 per cent correct comprehension
among those aware of the ad. This in turn would almost double sales without any
additional cost.
QUESTIONS
1. Why would some consumers have high-involvement levels in learning
about this sales promotion?
2 Is a level of 75 per cent comprehension realistic among those who
become aware of an ad? Why or why not?
3. Do you think such promotions are likely to influence the quality
image of the retail store? Explain.
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