markmantra feb 2011
DESCRIPTION
markmantra iift mbaTRANSCRIPT
arkmantra is the brain-child of IIFT, encompassing various dimensions
of marketing and exploring horizons of this integral business function.
To bring out the best in the marketing domain from the trivial to the
bizarre things that really matter which is aimed at enlightening the marketers is
the onus of the team. Trend analysis and innovation in the market are two prime
focus areas of the magazine. These, we think, will make you ponder upon how a
company proactively or reactively markets its offerings. Customer value is of
paramount importance to every marketer and we as IIFTians strive to provide
maximum value proposition to our customers, that is, you.
Marketing’s significance lies in value exploration, value creation, value
communication and value distribution. No matter where your interest lies, be it
Finance, HR, IT or Operations, understanding marketing is always important. As
they say, Balance Sheet is also a marketing tool and employer branding is also
fast gaining importance. So Markmantra will not only help the marketers but
also people interested in other streams by understanding the implications of
marketing on their decisions and vice versa.
EDITING TEAM
EDITOR-IN-CHIEF : Gaurav N. Gudhka
MANAGING EDITOR : Siddharth Girdhar
ASSOCIATE EDITOR : Radhika Ravichandran
M
Change is inevitable. However clichéd it may sound,
ultimate success lies in managing this change. Given
the whimsical nature of the external environment,
there are two ways to manage change- Embrace or
Fight. Avoidance is inane. To cope up with the fast
changing consumer preferences and a short Product
Life Cycle owing to fierce competition, a marketer
has to either be Proactive or Reactive, in order to
create value for the customers sustainably.
Technological advancements, increasing disposable
income, robust media influence and orthodox
societal influences have been critical in increasing the
bargaining power of customers. Customers are
becoming more informed while seeking value for
money be it a low or a high involvement product.
Amidst the bedlam caused by the marketers by virtue
of their extensive offerings to lure the customers, it is
imperative to know the customers‘ psyche to deliver
exactly what they want. Gone are the days when
customers‘ were satisfied with just the product and its
utility. There is only one boss- Customer, says Wal-Mart.
And the boss, in today‘s scenario, seeks a right blend
of Relationship and Utility. This calls for a synergy
between products and their related services. The
better the mix that one delivers, the more customers
one fetches. Product differentiation still remains a
predominant factor while selecting any product and
by differentiation we mean meaningful value addition
to match the expectations of the customers. To cater
to the varying needs of the customers, companies are
coming up with different SKUs (Stock keeping units)
and bundled products and offers. This is not only
restricted to the major FMCG companies but also to
the modern trade juggernauts with respect to the
Private Labels. Organised retail is fast capturing the
hearts of the consumers with increasing quantity of
private labels capturing the shelf space and
consumers reacting to the substitutes of their
preferred brands
without much
hesitation. Also,
Kishore Biyani of
Future Group, the
famous retail
transformer of
India, is making
the best of
Sensory branding
which triggered
his vision of
satisfying
consumer‘s wish to touch, smell and feel products be
it fruits and vegetables or grains. But with the plethora
of information available to the consumers, their
bargaining power has led to the dawn of Crossover
shoppers who buy pulses and grains from the local
kirana stores and visit modern trade retailers to satisfy
their need for packaged and branded products.
Brand loyalty is becoming a near myth with people‘s
preference towards private labels over national
brands.
With increasing disposable income, the purchasing
power of the customers is increasing and more and
more premium products are being sought after which
were once upon a time not matching with the
disposable income. On the other hand, SKUs are
becoming smaller and smaller taking into
consideration consumers needs for quick carry and
consumption, impulsive buying and one time usage.
With technological advancements, marketers have to
be watchful and acknowledge digital leapfrogging.
We see that people who never used the internet or
had a personal computer are using mobile internet
and smart phones. They are not going through a
standard evolution process. Hence marketers are
apprehensive about the changing demands of the
consumers, both rural and urban. Industry boundaries
are blurring as people‘s aspirations have augmented
to seek integrated products. Steve Jobs‘ brainchild
iPod, later iPhone and
now iPad are the best
examples of blurring
industry boundaries as it
incorporates
entertainment industry, telecom service providers,
handset makers, software developers and others to
deliver world-class products that command a
following of their own.
insights and create or modify the products and their
communication by banking upon the elements of
consumer behaviour such as affect, cognition and
environment. As the competition has intensified, cues
associated with the brand play a vital role in forming
customer perceptions. For example, travellers prefer
Kingfisher but not Jet Airways despite providing almost
same services by both the airlines. Dr. Vijay Mallya
plays a global cue which wins over Jet because of his
jubilant personality. Thus the significance of cues
remains paramount.
Consumers‘ preferences are dependent on various
factors. As these aspects change, consumer
behaviour changes simultaneously. Profound analysis
of the consumer behaviour over the last decade
reveals noteworthy changes. There is co-existence of
modernity and traditionalism in India. As modernity is
changing the role of media and information
technology, prospective customers are looking out for
different influencers depending on the channel of
communication. But family and friends still retain the
majority of the say. While the middle class is emerging
and the nation is becoming young, marketers are
targeting growing individualism adopted from the
western countries. People want to pamper themselves
like never before. Kids‘ influence has increased and
women‘s roles have emerged from the past traditions
to a new era of freedom and rights. Women, these
days, are taking decisions for themselves and their
families. Hence we see many promotional acts
targeted at them. Traditional value seekers have
become stronger and more active, one of the
examples is Crossover shoppers.
As we have entered into a new decade, we might
want to acknowledge some of the covert yet implicit
aspects of consumer behaviour. Sensory branding in
conjunction with sonic branding is one such aspect
which marketers should work upon. This will help to
gain customer confidence and enhance brand recall
and association. Marketers need to be tech-savvy to
cater to the elation of the digitalized world and social
media framework. Marketers must try to convert
satisfied customers into highly satisfied garnering
loyalty, rather than turning dissatisfied customers to
satisfied ones. Green consumerism is gaining impetus
in the market place. With increasing knowledge of
and concern for environment, customers are going
the green way, specially as the global economies are
fast recovering from the downturn.
Economics suggest rational customers tend to
maximise utility out of the product they buy to satisfy
their need. Other aspects such as emotions are
something that the marketer needs to handle with
élan. Needless to say, as the product life cycle is
becoming shorter, marketers have to constantly strive
to create and deliver value to the customers. The
fundamental 4 Ps are critical to decide the fate of a
product in the ever-changing global scenario.
Gaurav Gudhka
MBA (IB) 2010-2012
Indian Institute of Foreign Trade
.
There‘s a secret dream that every international
marketer‘s heart harbours, whether it remains a
distant dream for long or not is the question. The
underlying thread that weaves through all the
hype surrounding catchphrases like ‗glocalisation’
is but the convergence of consumer preferences
globally.
The ‗Global Village‘ is no more a myth thanks to
the rise of global capitalism, falling of barriers to
international trade, increasing interconnectedness
and a cross-fertilisation of ideas, which has been
further fuelled by the convergence of media and
technology and increase in income. Today, we
see a certain degree of homogenisation in the
global consumption patterns as national borders
and traditional cultural boundaries blur rapidly,
leading to the identification of global segments.
Yet, the idea itself isn‘t novel; Theodore Levitt in his
landmark 1983 article had argued that this
homogenisation of needs and wants was
inevitable as the rational consumer would
invariably prefer standardised products of high
quality and low price. So when
we see McDonalds
prospering around the
globe, western fashion
becoming common in
many eastern countries
and cross border music
channels like MTV
becoming a rage
everywhere, it‘s of little
surprise to the
international marketer.
The evidence is for
everyone to see
essentially in the form of
various marketing messages
of omnipresent brand identities predominantly in
the FMCG and technology sector. People around
the globe are developing preferences for the
same products, wearing the same type of clothes,
watching the same TV programs, and playing the
same digital games on their computers! And these
consumer behaviour trends are being reinforced
all the more by the print media, radio, TV and to a
great extent, the Internet.
Nevertheless, the convergence isn‘t perfect and its
foundations are regularly questioned in view of the
substantial variance in consumer behaviour across
nations. But with differences of per capita GNP
progressively disappearing, culture has become a
powerful variable to explain this trend, and which
the Hofstede studies also corroborate. National
culture, which is broadly the values, beliefs, norms
and behavioural patterns of a national group, is
subject to global culture‘s continual influence,
which in turn is instrumental in reshaping an
individual‘s personal culture. Even as these global
cultural values get transmitted to the individual, he
retains a set of core values, which helps explain
this partial
heterogeneity in
consumer
behaviour. Still, the
consumer tastes
appear to be
driven less and less
by long standing
local and regional
traditions, and
more by
perceived
desirability of
global brands.
Simultaneously,
there seems to be a shift in values as well towards
standardisation.
Products of culture-association, like alcoholic
beverages, etc. are harbingers of the degree of
cultural convergence. Research shows an
increasing health consciousness among
consumers as they switch to beverages containing
less alcohol, also a switch from the local traditional
drinks to beverages that are seen as more
fashionable and healthy has been observed.
Apart from such products, digital convergence
too is being largely guided by consumer
preference. Consumers globally have shown a
preference for mobile telecommunication
handset size similar to that of the current PDA or
mobile while adopting a considerably larger
display, thereby directing R&D to increasing the
pixels per inch, while still maintaining the
portability. But obviously, given some degree of
heterogeneity in this trend, partial, rather than
perfect, convergence is expected.
But the good news is that research also shows that
concerted strategic marketing efforts can affect
consumer perceptions and actually alter
consumer choices. This means, to be effective, the
various marketing activities like standardising the
product, identical brand names, uniform
packaging, synchronised product introductions,
similar advertising messages across markets in
various countries, have to be integrated and
coordinated well. Advertising should seek to
portray products in idealised and desirable
context, because globally consumers buy the
products that they believe express their identities.
The global marketer should take heart from the
fact that cultural traditions aren‘t impenetrable,
and that consumer choices can be affected by
intelligent strategic marketing, which is an
interactive and evolutionary process. Tempting,
though it may be to read the consumer psyche
every day and regularly adjust your marketing
model to it in consonance with local traditions, it is
not sustainable in the long run from an
international marketing perspective. The key is to
identify homogenous global segments so that if at
all any customisation is required, it is minimal.
Standardised marketing strategies and products
are actually the future drivers of cultural change
and consumer convergence.
Jayant Rana
MBA (IB) 2010-2012
Indian Institute of Foreign Trade
Sitting with a friend in the hostel, I saw an
advertisement on the net promoting a Hybrid
car. My friend wondered aloud on how many
consumers would be willing to spend those
extra bucks for the environment. This triggered
a series of questions. Are all the efforts that
corporates put in for promoting green
consumerism worth it? In the post recession era,
are there enough green consumers to target
them as a separate segment all together? Is it
important to target the niche green consumer
or focus on green behaviour that people feel
like following inherently?
Consumers belonging to either school, the
green or otherwise, would follow trends and
buy products that are green, if given the fact
that it would solve their problems in a similar or
better way as the non green product, the
catch being, without any extra inconvenience
in terms of cost and operational difficulty. Why
would not people want to make their planet a
better place to live in? The only answer I could
think of was that, it was due to the personal
inconvenience that would result from the use
of the product or due to the lack of awareness
about the product or its long term positive
effects.
Consider an individual, newly promoted at
work, who is looking to buy a bigger car than
his previous one, within a certain budget. (S)he
is told by his/her environment friendly
colleagues that a bigger car would cause
more pollution. Further they suggest that if he
wants to go forward with a bigger car he
should choose an environment friendly one
(like a Honda Civic hybrid), but which might
cost way above his budget (about 8 lakhs
above non hybrid version). In all probability he
would go for a non environment friendly car.
Now here lies the opportunity for the product
manufacturers. The product should not be
thought of as simply an offering for green
consumers but for every consumer. If the
environment friendly car would have been
priced keeping in mind the green outcome
rather than the green consumer, then it would
have been priced a bit more competitively
and would have been preferred by our
consumer.
Lately, there has been an increase in the
awareness levels of the people about the
advantages of green behaviour. But there is a
downside to this both during growth and
recession. The high cost of some of these
products restricts their usage and hence
purchase during the declining stage of the
economy because during that period
disposable income of people fall. Certain
green behaviours like buying small cars and car
pooling is not preferred by people during the
growth stage of the economy when people
have high disposable income, due to social
status and perception
Looking at the winning side Pay-as-you-go
(PAYG) is emerging as a winning consumption
model for the environment. For example, if we
look at the power sector smart grid initiatives
provide consumers with innovative pricing
models that incentivize them to reduce or shift
energy use during peak periods. Another
innovative model which is being developed in
the car insurance field in U.S.A wherein a
person takes insurance from State Farm and
pay on the basis of how much and how
responsibly they drive.
So is there a solution? Maybe! Professors John
Thogersen and Folke Ölander of the Aarhus
School of Business (Denmark) examined the
relationship between values and green
behaviour. Thogersen and Ölander examined
the impact of recycling on the values and
behaviours of Danish consumers over the
course of one year. The findings of the study
said that marketers face an uphill task if they try
and address environment friendly behaviour
before addressing values because it is the
values which drive behaviour and not the other
way round. Another important finding also
suggested that it is easier to influence the
buying behaviour of consumers who already
hold environment friendly values.
So the feeling is that there is no consensus on
whether green consumerism is growing or
declining but one thing is for sure that it is
bound to grow in the future for the sake of
mother earth. This is the cue for marketers to
tap this consciousness in consumers.
Siddharth Girdhar
MBA (IB) 2010-2012
Indian Institute of Foreign Trade
Creating strong brands has always
been one of the highest priorities of
most of the brand managers and
advertisers since long. That‘s
because a strong brand helps in
creating a strong positioning for the
product, increases top of the mind
recall, enhances brand loyalty,
offers the scope for product
extensions, and leads to financial
advantages through the idea of
‗brand equity‘. So in an age of
thousands of brands competing for
a limited amount of the consumer‘s
mindshare, creating a distinctive
communication strategy becomes
of utmost importance.
Celebrity endorsements are one of
the most popular ways marketers
try to pique the interest of
consumers in their product
offerings, since people quickly
recognise them and are naturally
attracted towards celebrities. It
also leads to more trust in the
brand as it gets endorsed by a
credible source. But even after that
stamp of credibility on a brand,
taking decision on which brand to
finally choose from all other close
alternatives can actually be an
anxiety-inducing activity for a
customer. And this anxious decision
making, leads to a critical post-
purchase evaluation of the
product or service on whether its
performance meets the
expectations, or not.
In this age of aggressive
advertising and brand
promotions, we see many a
celebrity endorsing a number of
brands, and also a single brand
being endorsed by multiple
celebs. This can potentially
create confusion in the minds of
the consumer, which coupled
with a performance-
expectation mismatch can lead
a psychological tension in his
mind, also known as cognitive
dissonance.
The term ‗cognitive dissonance‘
was coined way back in 1957 by
Leon Festinger, who described it
as a psychologically
uncomfortable state or
imbalance that is produced
when various cognitions about a
thing are not consistent. The
theory of cognitive dissonance
suggests that an individual has
cognitive elements (or
"knowledges") about himself, his
past behaviour, his beliefs and
attitudes, and his environments. If
one cognitive element follows
from another, they are said to be
consonant. If one does not follow
from another, they are said to be
dissonant and arouse the
psychological tension called
cognitive dissonance. And since it
is psychologically uncomfortable,
the individual changes the
dissonant cognitive element to
reduce the dissonance. Also,
stronger the cognitive
dissonance, the more strongly
motivated he is to reduce
dissonance by changing the
cognitive element.
For many years now, marketers
have been making use of the
public fascination with
celebrities by employing them
as endorsers or spokespersons
for their product and service
offerings. McCracken defined a
celebrity endorser as "any
individual who enjoys public
recognition and who uses this
recognition on behalf of a
consumer good by appearing
with it in an advertisement".
Even though celebrities are
given special attention because
they are perceived to be
different from the rest of the
population, yet they are also
considered to be like everyone
else, persons with whom the
public can identify and with
whom they can form para-
social relationships.
The following benefits of using
celebrities in advertising have
been identified:
capturing the
audience's attention
adding credibility to the
product or brand
making the
advertisement or
product easier to
remember
making the brand
easier to recognise, and
assisting in achieving
positive attitudes
towards the brand
There has also been a
steady rise in expert
endorsements in
advertisements in recent
times, which enhances the
believability of an
advertisement primarily due
to increased source
credibility.
Celebrity Endorsements and
Cognitive Dissonance
It has been sufficiently
established that the selection of
the ‗right‘ celebrity, who
matches with the attributes
assigned to the product, is
crucial for the effectiveness of
the advertising campaigns.
Even though the relation
between the product and the
endorser's profession mightn’t
always be evident, but his
lifestyle and mannerisms must
match the product, lest the
value will be lost. The ultimate
test is that the combination of
celebrity and the product
should create trust and
confidence in the consumer
and induce him or her to
accept the product as genuine,
useful and correctly priced.
In this way, the celebrity can act as
a trigger for the initial introduction
to the product and then the
product itself becomes the focus
because of its utility value to the
customer. But still, unless there‘s a
long term perspective, the
promotion would lack depth as it
may appear to be an isolated
activity, which is why there
emerges the need for creating
Brand Ambassadors. So even
though the life of a single
promotion might be small but in
reality its impact would carry over
to the next event or period, where
it can be renewed with some
differentiation but with same
vitality. Brand Ambassadors,
therefore, do more than just
endorse products; they actually
give it recognition and portray its
continuity in marked contrast to a
one-off campaign. This is what
creates a bond between the
celebrity and the consumer and
develops and affinity that
marketers hope will last for a long
time.
Additionally, research has pointed to
the possible negative consequences
of using celebrities who are mired in
controversy, and an endorsement
can succeed only when an
association is fashioned between the
cultural meanings of the celebrity
world, on the one hand, and the
endorsed products, on the other. The
best endorsements, consequently,
derive their efficacy from the
successful transfer of meaning.
To further strengthen the theory,
respondents to select researches
have expressed doubts that
celebrities used or even like, the
products they endorse, and that
they do endorsements only
because they are paid for them.
Also it has been established that
consumers place more weight on
negative information, as against
positive information, when they
have to form judgments about
brands, people, companies, and
so on. All of these contrasting
ideas that the marketer tries to
superimpose on consumers‘
already set ideas, spark off
cognitive dissonance.
Case Studies: Cognitive
Dissonance at Work
A brand is identified and
distinguished by various factors
and one of them is brand
associations. Celebrity
endorsements significantly add
value to brand equity. This value
is termed as ‗Borrowed Equity‘
to describe the value of the
celebrity. Some practical cases
from different sectors are
elucidated here, to understand
the relationship between
Celebrity Endorsements and
Cognitive Dissonance.
FMCG SECTOR
India has a vast FMCG sector
with around 180 FMCG
companies catering to a
population more than 1.2 billion.
Naturally, there is a plethora of
brands on offer in the extremely
competitive marketplace. To
break this clutter of brands and
win the consumers‘ mindshare
and heart-share, marketers try
to create high recall value with
the help of celebrities, which
increases the advertising
budget manifold. Although
these might be low involvement
products and the points of
parity remain more or less the
same, in order to emphasise on
the points of differentiation,
celebrities bring great sense of
rationality and consistency into
marketing. The market leader
Hindustan Unilever Ltd. spent a
whopping Rs. 2,449.02 crore on
advertising in the year ended
March 31, 2010. Name any
prominent brand in any sector
and there will be a celebrity
endorsing it. But what are the
chances of these celebrities
generating sales or causing
dissonance?
Bitterness over sweetness,
Big B at the rescue
In 2003, Cadbury faced an
unforeseen challenge, when a
few instances of worms in Dairy
Milk bars were reported in
Maharashtra. To restore
consumer confidence in its
chocolate brands and reduce
cognitive dissonance, Cadbury
signed up Amitabh Bachchan
as
brand ambassador to do some
heavy duty endorsement,
putting his equity at stake.
Cadbury in conjunction with
O&M created a campaign
which banked upon both
rational and emotional appeal
along with a revamped poly-
flow packaging. One of the ads
showed Bachchan visiting a
Cadbury plant, inspecting the
systems and processes and
finally consuming a bar of
chocolate to be convinced
that there's nothing wrong with
the brand. The other ad
featured Bachchan and his
granddaughter to emphasise
that the product was absolutely
safe for children. The company
bounced back soon after the
campaign hit the screens. The
recovery began in May 2004
when Cadbury's value share
went up from 69.4 per cent to
71 per cent after significant
advertising spend of Rs.40 crore,
up by 15% for the Jan-March
quarter.
Best celebrities during the
worst times
In 2003, the controversial
pesticide issues shook up Coca-
Cola and PepsiCo and resulted
in much negative publicity and
cognitive dissonance among
consumers. Both soft drinks
majors came up with high-
profile damage control ad
films featuring their best
and most expensive
celebrities. While Aamir
Khan led the coke fight
back, similarly PepsiCo
brought in SRK and Sachin
Tendulkar together. Indian
consumers wanted
someone credible to assure
them Coca-Cola wasn't
loaded with dangerous
pesticides and no one seemed
better than Aamir Khan. In a
television testimonial, a serious
but humble Khan, arms crossed
behind his back, told everyday
Indians that he cared for their
safety. The dreamy actor
donned a hairnet and looked
studiously at a test tube held by
a man in a white lab coat inside
a Coke bottling plant. He stared
into the camera and told
Indians to come see the plant
for themselves. And in the final
act of the 60-second ad, Khan
pulled a bottle of Coke Classic
from the manufacturing line,
popped the top and gulped
fearlessly. The fact that it
opened its plant to the public
sent a message that it didn't
have anything to hide.
The flux following King
Khan’s Lux advertisement
In 2005, HUL‘s Lux brand of soap
celebrated its 75 years of
existence and glory. To break
away from the tradition of
getting beautiful actresses to
endorse the brand, HUL tried
something new by choosing
Shahrukh Khan to endorse Lux,
target market remaining the
same as he appeals to women
across various strata. The
metrosexual appeal of SRK was
pertinently used as a soft touch.
On receiving mixed reviews, SRK
said, ―I don't know why it should
be such a big deal‖. Consumers
were taken aback to see SRK
bathing in a tub with petals
which looked like a gimmick
causing some sort of
dissonance. "The execution of
the ad could have been slightly
subdued‖, added Prasoon
Joshi, Regional Creative
Director, McCann Erickson. K. V.
Sridhar, National Creative
Director of Leo Burnett reacted,
―The ad is not tastefully done
and it seems Shah Rukh with his
clean-shaven chest is sharing a
private joke with the actresses.‖
Case of a Celebrity Endorsing
Many Brands
Tiger Woods, one of the most
esteemed sports personalities till
November 2009, had a host of
brands under his belt. And
consumers did believe that Tiger
actually preferred most of the
products he endorsed which
included Nike apparels, Titleist
golf balls, Gatorade energy
sports drink, Gillette products,
American Express card, Tag
Heuer watches, Accenture and
GM’s luxurious Buick. All the
brands he endorsed perfectly
suited his stature in the society
and sports fraternity. These
products gained a lot owing to
the borrowed equity acquired
from Woods‘ glorious appeal.
After signing Woods in 1996,
Nike golf balls saw a growth of
$50 million while the turnover of
golf line amounted to $250
million. But, after all it was
borrowed. Ultimately, after
Tiger‘s string of disgraceful
confrontations and infidelities,
the brands discontinued their
relationship with him. According
to a US study titled ―Celebrity
Advertisements: Exposing a
Myth of Advertising
Effectiveness‖, Woods was
rated as the worst celebrity of
2010 with his endorsement of
Nike. A study done by Ace
Metrix revealed that TV ads
featuring Woods lifted the value
of the campaign by minus 30
per cent.
Cognitive dissonance in this
case is due to the antipathy
caused by Tiger’s acts which
led to a loss of $7.5 million to
the various brands together.
Consumers of the products
endorsed by Woods showed
resentment towards Woods by
abandoning those products.
This is because consumers
despised Woods and naturally
their faith in the brand
endorsed by Woods was
baffled.
In recent times, there has been
such a deluge of celebrity
endorsements that it has led to
the very clutter that it aimed to
break. Here‘s a small piece of
statistic.
Fig 1. AdEx India analyzes
the Celebrity Endorsement in
TV during H1 ‗2010.
MS Dhoni has endorsed a
number of brands including
PepsiCo, Reebok, Exide, TVS
Motors, Videocon, Reliance
Communications, Dabur Honey,
Aircel Communications and
many more. Clearly, an
overload of brands and
categories associated with one
star. Bollywood baadshah Shah
Rukh Khan endorses Omega,
Tag Heuer, Pepsi, Hyundai,
Clinic All Clear and Airtel
among other brands since 1992.
Amitabh Bachchan endorses
Pepsi, ICICI, Parker Pens,
Nerolac, Dabur, Reid & Taylor,
Maruti Versa, Cadbury and a
few social messages too.
This over-exposure can be bad
for the brand. Each celebrity is
called upon to push maybe a
dozen brands or so which is
great for the celebrity, but it is
quite daft for the brand
because the impact of the
celebrity reduces as the number
of brand endorsed increases. As
many brands are endorsed by
one celebrity, all the brands
may not get equal borrowed
equity from the celebrity. This is
because people will remember
only those advertisements in
which that celebrity's
value is derived
more and the
celebrity is in good
fit with the brand.
Rest of the brands
won‘t get much
attention as the
recall value will be
low.
This leads to
dissonance in
consumer’s minds.
People have to
make a choice
between two brands
competing against each other
or against those being equally
attractive. If a celebrity
endorses different categories of
brands and changes brands
frequently, a consumer is bound
to have dissonance, as to what
exactly is being endorsed by
him. Also, when a particular
brand has many celebrities
endorsing it, dissonance takes
place as to which attribute of
the celebrity is exactly reflected
in the brand or the product.
Developing a Model for the
Marketer from Theory
Through this analysis we have
found out that celebrity
endorsements certainly do
spark cognitive dissonance, but
can also be used to harmonise
this dissonance, when need be.
In the Pre-purchase stage, a
customer is flooded by a
plethora of brands. In order to
select one out of them, a
rational consumer would
evaluate the most likely brands
on the basis of several
parameters. When the points of
parity are more or less the same
among the available choices, a
celebrity endorsement
influences the buying behaviour
by developing an association
with the customer. In the Post-
purchase stage, celebrities
reassure that the choice the
consumer has made is correct
by enhancing the perception of
the brand.
Consumers normally try to
overcome cognitive dissonance
by any of three ways- Justify,
Blame or Deny. For instance,
Smoking is injurious to health. But
quite often than not, people
behave ostentatiously to
associate themselves with their
symbolic groups. Also,
celebrities like Shah Rukh Khan,
who is considered as the King of
Bollywood, further spur the drive
to smoke by smoking in public.
This justifies consumer‘s
cognition. Consumers may also
blame tobacco companies,
and sometimes even outright
deny that all the information
regarding smoking being
injurious to health, is even
credible, only to reduce their
cognitive dissonance.
Sometimes celebrities
overpower the brand while
seldom their performance might
also demean the brand. Hence,
marketers have to take a
cautious call on celebrity
endorsements. Customers are
very vulnerable to even slightest
of movements in the
surroundings and are quick to
react. Celebrities not just cause
cognitive dissonance but also
help to cure it. Amidst the
bedlam caused by the
marketers, celebrities can make
or break the brand.
Recognising the points
elaborated above, Marketers
have to be cautious that there
brands don‘t suffer from a
cognitive dissonance, and can
adopt the following few
measures to reduce this
dissonance.
Choose celebrities very
carefully, while keeping
his/her image in sync with
that of the product.
Discontinue with celebrities
that are mired in
controversies continuously
Psychologically increase
the attractiveness of your
product and decrease the
attractiveness of the
rejected alternative
Change the existing
opinion about the forced
action to make it more
consonant
Compliment the
consumer's wisdom
(reflected in their purchase
decision)
Offer strong guarantees or
warranties
Increase the number and
effectiveness of services
and provide detailed
brochures on how to use
the products correctly
Conclusion
It‘s now quite evident that
celebrity endorsements do
spark cognitive dissonance,
which may lead to the
customer switching brands
to reduce it. Also, celebrities
do help in improving the
image of a brand, but that‘s
not sustainable for either the
brand or the celebrity if the
product is not good.
Marketers must be aware of
the impact this dissonance
can have for their brands,
and must operate carefully,
if they want to make their
brands the market leaders.
Gaurav Gudhka Jayant Rana
MBA (IB) 2010-2012 MBA (IB) 2010-2012
Indian Institute of Foreign Trade
Today a Brand is not just an identity of a
product or a service or anything that
differentiates itself from the competitor and
reaps in profit. A Brand has transformed itself to
become the identity of the consumer. Gone
are the days when a Brand used to highlight a
company‘s offering. Today a Brand focuses on
consumers, their emotions, their status and their
self-esteem.
Customer equity, along with Brand equity is fast
gaining importance. Valuing customers is as
important as valuing brands as both are said to
be mutual beneficiaries. None can work in
isolation. Although, the focus has moved from
the product to the customer, customer is no
more the king, with brands growing bigger and
better than ever. Producers are working
towards converting a want into a need.
Products like a photo copy or a chocolate is
known as Xerox and Cadbury in India. That‘s
the power of a brand.
TATA is one of the most respected and trusted
Brands of our nation and
when someone uses a
TATA product or
service, the person
feels dignified; (s)he
feels valued. This is the
power of Brand ‗TATA‘.
TATAs have worked
very hard to lay a strong
foundation to the customers‘ dreams. It
symbolises self-esteem when the ―one-lakh
Nano‖ is driven by an average middle class
who could not afford a car. TATAs have also
been a part of Indian culture. Whenever a
marriage takes place in
India, one of the most
common things gifted to
the groom is Titan watch.
No other brand has been
able to take its place. This
goes on to say that a
brand like TATA has found
its place in the hearts of
the Indians and has become a part of the
culture which in turn gives a sense of
complacency and identity to its users. This is
Cult Branding.
In this extremely competitive world, for a Brand
to survive and evolve as the consumers‘ most
preferred choice, it has to fight the cut-throat
competition by creating points of
differentiation. A Brand must focus on
something that will provide its users an identity
which is easily differentiable if not superior to
that of others. IKEA, one of the most innovative
companies of the world, is delivering
excellence in terms of its functional and well
designed furniture line which is absolutely
affordable in order to reach as many
customers as possible rendering a sense of
dignity in them. It symbolises technological
superiority with simplicity so that the users feel
more valuable.
Today‘s consumers use brands to build their
own identities. Some even like to be known by
the brands that they use. If your brand can give
them that, it will survive, and if the identity takes
into account the cultural aspects of the
consumers, they will love your brand and make
it immortal. Not that it‘s always a brand that
has to strive. These days customers eye the
most coveted brands like Apple and
Volkswagen to be attached to in order to
enjoy a superior status.
Market Researchers not only gather
demographic information but cultural
influences and preferences are also taken into
consideration, so that a Brand does not remain
just a Brand but become a way of life. Brands
need to value the culture, using the uniqueness
of target groups to market themselves
accordingly. Those who have done that have
been very successful like McDonalds.
It has proved to be a truly global brand by
adopting the cultural differences of different
regions to merge it into one.
Branding is a dynamic process and everybody
is trying to build an eternal Brand. For one to be
successful it has to learn to be empathetic and
make use of the cultural and emotional
aspects and the values attached with the
consumers. Branding, today, means branding
lives (of its users) which in turn will help a Brand
live longer. It‘s for time to decide who will rule
whom. For the moment Brand and Customers
stand at par.
Niyati Trivedi
MMC (AV) 2010-2012
Symbiosis Institute of Media & Communication,
Pune
After World War I, Adolf (Adi) Dassler, a German, started making high quality
handmade sports shoes in his mother‘s laundry in Herzogenaurach, Bavaria.
In 1924, his brother Rudolf joined hands with him. Together, they established
Gebrüder Dassler Schuhfabrik (Dassler Brothers Shoe Factory). Little did they
know that some day their brand of shoes will be a lovemark in the global
market. The sales picked up fast and with Afro-American US sprinter Jesse
Owens winning 4 golds wearing Dassler shoes in 1936 Olympics, the sales was further
boosted. But as they prospered, rift grew between the two. From business to politics (both of them had
joined the Nazis), they disagreed on a great deal of things which eventually led to the split of the
establishment in 1948 and thus the formation of two spectacular companies called Adidas (Adi Dassler)
and Ruda (Rudolf Dassler). Later Ruda was renamed as Puma.
Both the brands are widely embraced today. While Adidas is the
largest sportswear manufacturer in Europe and the second largest
in the world after US‘s sensational Nike, Puma is one of the major
rivals and has lately been inclined towards US markets. They are
quite akin in the way they market their offerings: sports utilities and
lifestyle products i.e. footwear, apparels, and accessories. They
have always been ecstatic sponsors of various football and Olympic
events and teams. Having done humongous promotions and sponsorships in the past, in
recent times, Adidas introduced a new ball for the FIFA WC 2010 called ‗Jabulani‘
which met with criticism with respect to control of the ball and the whereas Puma
has signed two year deals to make the kits of Newcastle United, Motherwell,
Hibernian & Burnley from the 2010–11 season and has renewed the contract with
Jamaican sprint superhero, Usain Bolt until 2013. Adidas was not only the official
sponsor of the 2010 Football World Cup
but it also sponsored teams such as Spain,
Argentina, Germany, France, Mexico and South Africa.
Puma sponsored the teams of Ivory Coast, Cameroon,
Ghana, and Angola besides Italy, Switzerland, Paraguay
and Poland.
On one hand, Adidas conquered Reebok in 2006; on the
other, Puma was taken over by Pinault-Printemps Redoute
(PPR), a French luxury group which has Gucci under its
belt, in 2007.These blood brands have a strong foothold in
the global market but it may seem that Adidas is more
proactive globally as compared to Puma which happened to be more so after Horst, Adolf‘s son, took
over and supplemented the growth. He sold sports utilities by using sports events as an advertising
platform thereby promoting sports invariably. For quite some time Puma tasted bitter losses and soon
learnt that the product is what matters in the end. Puma is a doing a great job in lifestyle products
whereas Adidas has an edge in sports shoes. Both the companies bank upon innovation and quality.
Puma‘s largest market is US followed by Japan. Being the sponsor of Usain Bolt of the Olympics fame,
Puma has gained huge success in China after 2008 Beijing Olympics.
‗Impossible is nothing‘ holds true and has changed the outlook of not only Adidas but also Puma. Better
and innovative products have helped these blood companies to survive through the thick and thin and
emerge as global leaders. Adidas wins over Puma having six times the financial resources and is more
focussed on core sports like football and tennis in addition to a stronger distribution network. Although
Puma has missed the bus, it has the calibre to lead the league in the years to come. Way to go bro!
Sukesh Chande
MBA (IB) 2010-2012
Indian Institute of Foreign Trade
I learnt how to grow brands at Ogilvy & Mather. (1973-87) I learnt how to grow people who grow brands at Lintas. (1987-91)
In 1992, I invented a way for people to learn-while-earning.
That was the birth of Univads, which evolved into Univbrands. Because there are more ways to grow brands than just ads.
And the best way to learn to build brands is the same way that you learn to ride a motorbike. Someone shows you the gears and rides
along with you to make sure you don't fall off. And once you learn, you never forget.
That's what I now do for a living. I help people master the various
common sense ways there are to build brands. And the beauty is that the coaching can be done online. And on-the-job. So you get to earn while learning. You don't even have to take time off to get
trained.
This way training is no longer a cost. It becomes an immediate source of profit.
Earning is believing.
Specialties
Word-of-Mouth Marketing; Self-Financing Promotions; 21st Century Brand Building; Relationship Marketing; Idea Management; Presentation & Communication Skills; Helping people grow in their
careers
Mr. SUMIT ROY, Founder Director at UNIVBRANDS
Q1. Having worked in the advertisement industry, how do you think the media communications have
evolved over the last decade?
That's going to take a book to answer well. But here it is in a tweet. 21st century "advertising" is now a
conversation. You can choose to listen and respond. Or be prepared to fall like Hosni Mubarak in Egypt.
Q2. Marketing communication channels have had an evolution from Print to Television to Internet.
Further, do you see word of mouth marketing complementing these existing channels or is it the next
stage of evolution?
Word of Mouth is much older than any of the media mentioned here. I don't quite agree with the
"evolution" analogy at all. While each medium that you have mentioned may have become popular
at different periods of time, they have not become extinct and given way to a next generation like
Neanderthal to Cro-Magnon to modern day Homo Sapiens.
All these media will survive and grow. In fact, each will help the other grow. Word-of-mouse is not going
to kill Television or Print or Radio or Out-of-Home. They will integrate. (Most have already. Notice the
number of other media that mention website addresses and Facebook pages.) It's not WOM vs Print or
WOM vs Television. It's WOM x Print x Television x .....
This spreads the reach of a brand in Geometric Progression instead of just the Arithmetic Progression
that we were used to in the last century.
Q3. Mobiles (e.g. blackberry) and Music Players (e.g. Apple Ipod) are two such accessories which
have been branded to create a high degree of involvement with the consumers. Can this concept be
successfully extended further to other such products?
Branding through product design and consumer involvement has been around for a long time. From
Dhakai Sarees to K C Das Rosogolla the Indian Entrepreneur has been more savvy than Business School
Bred marketing professionals. It's the marketing professionals who are now rediscovering common
sense.
Q4. Do you think that the branding exercise is losing its relevance in the FMCG and apparel sector with
the increasing sales of private labels which are sold just at the point of sale with very low branding
efforts?
The question is based on a mistaken belief that you first produce a product and then you create a
brand around that product. Another B-School generated myth.
By "private labels" you probably mean "store brands". It is perfect common sense to first create a brand
by winning the trust of a set of consumers. (You first create "good will", a common sense term that all
shop keepers know but I guess B-Schools don't find fashionable.) Then you provide them the products
that they want. And since they trust your "brand" they will also trust the products you certify with your
"private label".
A brand has an intangible emotional relationship that a set of consumers values. It isn't produced in a
factory, Any quality product or service that is consistent with that relationship will be acceptable under
that "brand". You don't necessarily need money to build a brand. You need an idea that has an
emotional connect. And you need effort. Yes, money can buy you that emotional connect and effort.
But just money won't get you there. You still need the emotional connect that wins over the hearts of
consumers.
Q5. How is the success of a Brand Building Campaign measured quantitatively and qualitatively over
the time?
By the amount that you can sell the brand at. For its "good will". Another way to measure the
effectiveness of a brand building campaign is to measure the change in the number of customers who
are willing to strongly recommend the brand to their friends and relatives.
Q6. A House of brands (e.g. TATA) vs. A Branded house (e.g. Hewlett Packard), Which of these is better
in terms of risks involved and advantages accrued from branding and communication?
Both can be equally good. What matters is the nature of the emotional relationship that the consumer
is looking for with the brand. As an integral part of the relationship, you decide whether you want to
marry a particular person or marry into their family. Most people in India prefer to have a relationship
with both. If you are looking for a short term fling, (use each other, for mutual benefit, without a long
term relationship), you probably wouldn't care much about the "house". Notice how Fastrack, actually
from the house of Tata, chooses not to highlight that it is from that "house". So it all depends on the
emotional truth that the brand chooses to be based on.
Q7. There is always some inertia among consumers to change their existing personal care products
(facewash/creams/toothpaste). As a branding consultant, suggest some ideas to overcome this?
Discover an emotional truth that overcomes that inertia. Then build your brand around that truth.
Interviewed by:
Rajesh Noudury & Siddharth Girdhar
Hierarchy-of-effects theory | The series of steps a consumer takes in order to receive and use
information in order to reach decisions about actions they will take.
Horizontal marketing | Joint marketing efforts that allow two companies to produce different products
yet market them together. Sometimes horizontal marketing is referred to as symbiotic marketing.
Sonic Branding | It is the use of sound to reinforce brand identity. Sound branding is increasingly
becoming a vehicle for conveying a memorable message to targeted consumers, taking advantage
of the powerful memory sense of sound.
Brand Chain | The brand chain begins where the classic supply chain ends. While the supply chain is
made up of value-adding inputs leading to the product, the brand chain begins with product
development and focused on the customer. Through brand platforms and programs it delivers multiple
forms of downstream value. The brand chain consists of creative brand interactions between customer
and company, customer and product.
Affiliate marketing | It refers to using a network of partners to market a company—usually internet-
based in which a company rewards or compensates an affiliate for each customer directed to it.
Affiliates can include blogs, shopping sites, and comparison sites.
Co-branding | An agreement between two brands to work together in marketing a new product, such
as Dreyer's Ice Cream flavoured with Baby Ruth candy pieces (promoting both brands on the label).
Differentiated marketing | Sales growth strategy in which several market niches or population segments
are targeted with different products for each niche or segment.
Prestige pricing | Setting a high price based on the quality and the demand for which consumers are
willing to spend. For example: Starbucks gives a feeling of a high end product by its packaging,
delivery and product promise, based on years or consistent promotion in its iconic coffee houses as
"creating a product of excellence
Price bundling | Selling 2 or more goods or services as a single package, as in Taco Bell offers 2 hard
tacos, a burrito, and a drink in a package for 1 price (usually a saving if you add up the prices of each
individual item).
Selective distribution | Contracting with several, but not all available channel members to move the
product through the commercialization schedule. Attention is given to those channel members willing
to give special attention to the product or service, such as employing a sales force to help sell/move
the product to the next channel.
Siddharth Girdhar
MBA (IB) 2010-2012
Indian Institute of Foreign Trade
Company: APPLE Inc
Sector: Computer Hardware,
Computer Software, Consumer
Electronics, Digital Distribution
New Products: APPLE iPad2,
iPhone5 and Apple TV
Technology major Apple is all set to launch
an entire re-programmed dual GSM-CDMA
iPhone and iPad comprising an increased-
resolution screen and an SD card slot, and
a fresh and new Apple TV along with an A5
processor competent of giving out 1080p
video. Apple's forth coming product line for
the year 2011, comprising the iPhone 5, iPad 2 and the 2nd
generation of the re-developed Apple TV are already
gathering a lot of responses. iPad shall continue at 10
inches but the surprise factor is both the front and the back
cameras and if that is not a huge surprise then there's also
a SD slot. Price might rise a little but will remain under$850
in US.
Company: Yamaha
Corporation
Sector: Conglomerate dealing in musical instruments,
automobiles, audio/ video, vehicle engines
New Products: New upgraded YZF-R15 and scooter BW125
Yamaha has a few interesting launches planned
for mid 2011. The Japanese major has been
launching new products and upgrades
consistently for the past three years since it
regained ground following the launch of the YZF-
R15 and the FZ series and the recently launched
SZ series. For 2011, Yamaha launched the new
upgraded YZF-R15 in the month of January and
the new bike has significant exterior changes as
well as minor tweaks to the engine and a fatter
rear tyre along with a split-seat setup. Also on
cards are the Yamaha scooter models, the Fino
and the BW125. The ex-showroom price of the
new YZF-R15 ranges from Rs.1-1.5 lakhs.
‗Why should boys have all the fun?‘ Because Yamaha is
giving them enough reasons to.
Organisation: Telecom Regulatory Authority of India (TRAI)
Sector: Telecom
New Service: Mobile Number portability
Mobile number portability, or MNP, lets cell
phone users change their service provider while
retaining their number. The service was
introduced in the northern Indian state of
Haryana on Nov 25 and was extended across
the country from Jan 20.
India is the largest and second-fastest-growing
telecom market in the world, with about 730
million wireless users. The launch of MNP in the
country is likely to prompt operators to further
reduce call tariffs--already among the lowest in
the world--to gain users from rivals or retain
existing ones.
Karishma Talwar
MBA 2010-2012
FORE School of Management
“Marketing takes a day to learn.
Unfortunately it takes a lifetime to master.” - Philip Kotler
Send your feedback and comments to [email protected]