There is simply no alternative to an effective advertising campaign. You may have the best product in the world, but if your advertising campaign falls short, it could all be in vain
A question for you – which company kickstarted the fast moving consumer goods (FMCG) industry in India? If your answer is
Hindustan Lever Limited (HLL), I would not blame you. Out of every ten television commercials, HLL accounts for more than half. No wonder, one tends to forget that Dabur was the company that introduced the concept of FMCGs to India. During 1999, HLL spent Rs.7,154 million on advertising, which was 600% higher than what Dabur, the next largest advertiser, had incurred. With thousands of new brands jostling with the old and existing brands for occupying the mind-space, we are in for a brand clutter. And the rule is sparklingly clear – Only the one who tells more (that is, spends more in marketing, advertising and promotion), sells more!In 2006, HCL completed its 30 years and it realised that – forget the consumers – even its own recruits didn’t know how much the company does. HCL is a dominant IT player; and yet, other players have become more visible than it. It was time for some serious brand building. The company decided to go on a high-decibel advertising spree, spending crores on brand building. As I said earlier – if you spend more, you sell more. The more visible you are, the better your chances of success will be.It’s highly debatable who is a better candidate for the Presidency of America. Is it Clinton with all her years of experience or is it Obama with his promise of bringing about change in the country, coupled with his youth & charisma. However, at this point in time in the race for the White House, the only factor responsible for the success of any political campaign strategy is ‘Money’!In the first week of April, for 8 days, Barack Obama spent an average of $400,000 a day on TV ads, totaling to an ad spend of almost $3 million. Hillary Clinton’s campaign was still below $1 million. If Obama continues to spend like this, his chances of wining Pennsylvania are almost sure and this “ad crush” would ensure his Democratic nomination and Hillary’s ouster from the race. Obama is the one with deep pockets and that gives him the power to do more – to recruit more, travel more and most importantly, advertise more.
Once is not enough
Luxor is one of the oldest brands in the country and also a market leader in the writing instruments segment. D. K. Jain, Chairman & President, Luxor says, “We have been the market leader for more than two decades, yet we feel the need for a new campaign, because many tend to forget domestic brands in the face of a host of multinational brands, which are now present in India.” That’s the key factor. Public memory is very shortlived and you need to remind it constantly that you exist.Barista and Café Coffee Day are in for some serious “brand thinking”. With international chains like UK’s Costa already in and Starbucks gearing to come to India, our own domestic chains are getting cold feet. The biggest problem is most chains still don’t have enough of a national presence, neither do they have enough margins for mass media advertising. They are now going to be pitted against competitors who are coming to India with big reputations and big marketing budgets.The secret to success is ‘sustenance’. You need to sustain your communication effort over the long term. Just launching a great product is not enough; you need to tell the world about it repeatedly. According to a popular advertising theory, it takes a minimum of nine repetitions before the consumer actually considers your advertisement seriously and wonders if it amounts to anything. By the 13th time, he thinks what you are advertising is a good thing. By the 14th time that he sees the same ad, he remembers he wanted such a thing for a long time. By the 19th time, he counts his money carefully and by the 20th time that he sees the advertisement, he goes and buys the article. Yes, a minimum of 20 repetitions is required before the first purchase. What it is tantamount to is that in today’s marketplace, the one who makes the maximum noise wins. Not just a good product but a large budget too is required. Barista may be as good as Costa or Starbucks, but the one who advertises more will garner more market share.
Learning from the movies
Earlier, producers used to keep aside 10% of the making cost of a film for advertising. Times have changed drastically since then. These
days, the major studios have annual advertising budgets that run from Twentieth Century Fox’s $185 million to Disney’s $300 million. Today, marketing a movie costs almost as much as making it.In 1995, a movie that cost $35 million to produce could cost $30 million to advertise; the definition of advertising itself has changed. It’s no more confined to newspapers, magazines or TV, but also includes T-shirts, caps, comics books, mugs and whatever you can think of. Every movie, mainstream or independent, big or small, needs as much hype as it can get, regardless of its quality.Last year, SpiderMan-3 was released. Made on a budget of $258 million (making it the most expensive film ever made) and backed by high voltage advertising, it muscled off a better albeit smaller, less grander film London to Brighton out of theaters. Though the story of the latter was more gripping and the lead actress got nominated for many awards, the film, due to its low advertising budget, couldn’t stand up to the might of the Hollywood biggie SpiderMan-3. Back in India a small budget film Mithya was released neck-to-neck with a biggie – Jodhaa Akbar, starring two of India’s most loved heartthrobs Hrithik & Aishwarya. Yet, it was the marketing of Mithya with full page ads in the newspapers that helped it sustain the mighty Jodhaa Akbar and run to packed houses for weeks. Even in movies, the first week run shows a strong relationship between attendance (i.e. ticket sales) and advertising.
The invisible factor
Great advertising may not add new features to your product, but it makes it desirable by changing peoples’ perception about it. It’s
the invisible hand that steadily builds the product.However, many a time, especially when business is not good, our instinct demands that we cut down the advertising budget.Business cycles come & go and research has proved that those with the determination and courage to maintain and even increase their advertising budgets, no matter what comes their way – recession or boom – are in fact the ones who, in the long run, reap a major sales advantage. Continuous advertising sustains market leadership and it’s commonsense that maintaining your position is much better than recovering lost ground. So don’t stop advertising when the going gets tough. Remember, during the Great Depression, it was Kellogg that had the guts to increase its spending, and till today, its market leadership remains strong.Harley Davidson, Nike, Starbucks are some very popular global brands. They have reached “cult” status. If you analyse them carefully, you realise that the one thing that they never compromised on was advertising.There’s a theory that the more you advertise, the less effective your ads become. When you are new, you create an impact, but as you become familiar, your ads lose their punch. So you cannot have the same budget – you have to increase it to reach out to the consumers; or else, the competitor will overshadow you. No wonder, the very top brands have remained at the top because they have been backed by large, ever-increasing advertising budgets.Marketing & advertising are matters of great vision & commitment; as the marketplace gets cluttered, these become very expensive commitments and only those who have deep pockets will sustain.A great product is necessary to make a mark but the one who advertises the most, the one who creates the maximum noise, wins in the long run. So go ahead and be fearless, and go out there with determination, for if you need to win in the market, you need to make some noise...
A question for you – which company kickstarted the fast moving consumer goods (FMCG) industry in India? If your answer is
Hindustan Lever Limited (HLL), I would not blame you. Out of every ten television commercials, HLL accounts for more than half. No wonder, one tends to forget that Dabur was the company that introduced the concept of FMCGs to India. During 1999, HLL spent Rs.7,154 million on advertising, which was 600% higher than what Dabur, the next largest advertiser, had incurred. With thousands of new brands jostling with the old and existing brands for occupying the mind-space, we are in for a brand clutter. And the rule is sparklingly clear – Only the one who tells more (that is, spends more in marketing, advertising and promotion), sells more!In 2006, HCL completed its 30 years and it realised that – forget the consumers – even its own recruits didn’t know how much the company does. HCL is a dominant IT player; and yet, other players have become more visible than it. It was time for some serious brand building. The company decided to go on a high-decibel advertising spree, spending crores on brand building. As I said earlier – if you spend more, you sell more. The more visible you are, the better your chances of success will be.It’s highly debatable who is a better candidate for the Presidency of America. Is it Clinton with all her years of experience or is it Obama with his promise of bringing about change in the country, coupled with his youth & charisma. However, at this point in time in the race for the White House, the only factor responsible for the success of any political campaign strategy is ‘Money’!In the first week of April, for 8 days, Barack Obama spent an average of $400,000 a day on TV ads, totaling to an ad spend of almost $3 million. Hillary Clinton’s campaign was still below $1 million. If Obama continues to spend like this, his chances of wining Pennsylvania are almost sure and this “ad crush” would ensure his Democratic nomination and Hillary’s ouster from the race. Obama is the one with deep pockets and that gives him the power to do more – to recruit more, travel more and most importantly, advertise more.Once is not enough
Luxor is one of the oldest brands in the country and also a market leader in the writing instruments segment. D. K. Jain, Chairman & President, Luxor says, “We have been the market leader for more than two decades, yet we feel the need for a new campaign, because many tend to forget domestic brands in the face of a host of multinational brands, which are now present in India.” That’s the key factor. Public memory is very shortlived and you need to remind it constantly that you exist.Barista and Café Coffee Day are in for some serious “brand thinking”. With international chains like UK’s Costa already in and Starbucks gearing to come to India, our own domestic chains are getting cold feet. The biggest problem is most chains still don’t have enough of a national presence, neither do they have enough margins for mass media advertising. They are now going to be pitted against competitors who are coming to India with big reputations and big marketing budgets.The secret to success is ‘sustenance’. You need to sustain your communication effort over the long term. Just launching a great product is not enough; you need to tell the world about it repeatedly. According to a popular advertising theory, it takes a minimum of nine repetitions before the consumer actually considers your advertisement seriously and wonders if it amounts to anything. By the 13th time, he thinks what you are advertising is a good thing. By the 14th time that he sees the same ad, he remembers he wanted such a thing for a long time. By the 19th time, he counts his money carefully and by the 20th time that he sees the advertisement, he goes and buys the article. Yes, a minimum of 20 repetitions is required before the first purchase. What it is tantamount to is that in today’s marketplace, the one who makes the maximum noise wins. Not just a good product but a large budget too is required. Barista may be as good as Costa or Starbucks, but the one who advertises more will garner more market share.
Learning from the movies
Earlier, producers used to keep aside 10% of the making cost of a film for advertising. Times have changed drastically since then. These
days, the major studios have annual advertising budgets that run from Twentieth Century Fox’s $185 million to Disney’s $300 million. Today, marketing a movie costs almost as much as making it.In 1995, a movie that cost $35 million to produce could cost $30 million to advertise; the definition of advertising itself has changed. It’s no more confined to newspapers, magazines or TV, but also includes T-shirts, caps, comics books, mugs and whatever you can think of. Every movie, mainstream or independent, big or small, needs as much hype as it can get, regardless of its quality.Last year, SpiderMan-3 was released. Made on a budget of $258 million (making it the most expensive film ever made) and backed by high voltage advertising, it muscled off a better albeit smaller, less grander film London to Brighton out of theaters. Though the story of the latter was more gripping and the lead actress got nominated for many awards, the film, due to its low advertising budget, couldn’t stand up to the might of the Hollywood biggie SpiderMan-3. Back in India a small budget film Mithya was released neck-to-neck with a biggie – Jodhaa Akbar, starring two of India’s most loved heartthrobs Hrithik & Aishwarya. Yet, it was the marketing of Mithya with full page ads in the newspapers that helped it sustain the mighty Jodhaa Akbar and run to packed houses for weeks. Even in movies, the first week run shows a strong relationship between attendance (i.e. ticket sales) and advertising.The invisible factor
Great advertising may not add new features to your product, but it makes it desirable by changing peoples’ perception about it. It’s
the invisible hand that steadily builds the product.However, many a time, especially when business is not good, our instinct demands that we cut down the advertising budget.Business cycles come & go and research has proved that those with the determination and courage to maintain and even increase their advertising budgets, no matter what comes their way – recession or boom – are in fact the ones who, in the long run, reap a major sales advantage. Continuous advertising sustains market leadership and it’s commonsense that maintaining your position is much better than recovering lost ground. So don’t stop advertising when the going gets tough. Remember, during the Great Depression, it was Kellogg that had the guts to increase its spending, and till today, its market leadership remains strong.Harley Davidson, Nike, Starbucks are some very popular global brands. They have reached “cult” status. If you analyse them carefully, you realise that the one thing that they never compromised on was advertising.There’s a theory that the more you advertise, the less effective your ads become. When you are new, you create an impact, but as you become familiar, your ads lose their punch. So you cannot have the same budget – you have to increase it to reach out to the consumers; or else, the competitor will overshadow you. No wonder, the very top brands have remained at the top because they have been backed by large, ever-increasing advertising budgets.Marketing & advertising are matters of great vision & commitment; as the marketplace gets cluttered, these become very expensive commitments and only those who have deep pockets will sustain.A great product is necessary to make a mark but the one who advertises the most, the one who creates the maximum noise, wins in the long run. So go ahead and be fearless, and go out there with determination, for if you need to win in the market, you need to make some noise... Copyright ©:-Rajita chaudhuri and Planman Media
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist)
An Initiative of IIPM, Malay Chaudhuri and Arindam Chaudhuri (Renowned Management Guru and Economist)
but a “coffee tasting” experience according to Starbucks. Customers were instructed to smell, then slurp (which enabled the subtle flavours to reach your nose), then taste and then describe the whole experience. With the help of this event the company attempted to connect with the customers. It wanted them to not think of Starbucks as a corporation, but as a place where you have the most fabulous coffee drinking experience.A recent poll revealed that a lot of consumers felt that the Starbucks brand is no longer fashionable, no longer in vogue. The name seems to have lost its cool. Some say Starbucks, which rose in popularity on the basis of its claim to be committed to ethical coffee sourcing has, along the way, lost its heart. One reason could be its very rapid growth, which turned off many consumers. Another reason could be its quickly eroding competitive advantage. Today, everyone right from McDonalds to other coffee houses have similar flavours and product offerings as those of Starbucks. To top it all everyone now claims to sell ‘ethical’ coffee! In a desperate bid to climb back on top of the popularity ladder, early this year, Starbucks sacked its CEO Jim Donald and brought back its original founder Howard Schultz. Schultz soon realised it was a series of below-the-line (BTL) activities that could slowly nurture back the good-ol’ reputation of the brand. From making sure that the outlet smells of roasting coffee, by banning the sales of hot breakfast food (which was masking the smell) to giving away free samples of its new coffee flavour, Schultz is doing it all. If distributing free coffee was not enough, the company now plans to give away free coupons every Wednesday (till May 28) in USA … their logic... not everyone could make it to the big event on April 8, when they distributed free coffee. The company upped its advertising budget from $38 million in 2006 to $68 million in 2007, yet it knew that just advertising is going to take it nowhere. It needed events that could be customised, made more interesting and hence generate greater impact on the target audience. Come to think of it, till very recently Starbucks did not see the need for such activities… competition made it rethink.Decades ago, on April 22, 1970, Earth Day was celebrated, to draw the attention of the world toward things that were harmful to the earth and the environment. Today, according to Advertising Age, Earth Day is the new Christmas when all companies paint themselves green to help raise awareness, but more so to raise their sales. Today, any day of any significance (and believe me there are a whole lot of them) is a marketing event. Be it Earth day, Halloween Day, Friendship Day, Grandparents Day…whatever. From enviro-friendly toys, to reusable bags, to green tea to even Barbie, everything goes green during the Earth Day week and gives marketers the chance to organise huge events to promote the cause and their sales too. Remember a cricket match played a few days back in Kolkata? I would not blame you if you cannot recall the names of the teams or the players except Shah Rukh Khan. After all it was not the game, but the before and after activities that caught the fancy of the nation. From eye-boggling cheer-leaders, to fireworks, to celebrity line-ups, the match had it all. Cricket was incidental. Shah Rukh Khan’s amazing promotions surely won him the ‘man-of-the-match’ title. That’s the power of BTL. It can entertain you and charm you into remembering the product or service. It gives you reason to discuss the brand, something every marketer dreams of.
seriously. A few engaged in short term sales oriented activities, sometimes even in rural areas, when they saw their bottomlines in red. That outlook is changing. Today, below the line is growing almost 200% faster than traditional advertising. BTL is more measurable and can be fine tuned to suit the different customer groups – much more than advertising. The increase in clutter is making it very difficult for advertisers to get noticed by customers who matter the most. Moreover, everyone is looking for measurable, quantifiable investments, making BTL the best option available for marketers.
the richest club, beating Manchester United, who were the richest for 8 years and for the first time slipped to the second spot. Real Madrid, which won the Spanish Liga last season, saw its revenues leap 20 percent to 351 million euros during the 2006/07 season, while Manchester United posted revenues of 315 million euros, (according to a survey done by the accountancy firm Deloitte). One of the main reasons for Real Madrid’s increase in revenues was David Beckham. It is not so much the number of goals he scores but the number of shirts he sells, which makes him such a hero among marketers and fans alike. Real Madrid had great players, but that’s not enough in today’s world. It needed someone who could bring sponsors to their stadium. It needed someone who could charm and entertain the spectators with his skills on the field. It needed David Beckham and didn’t hesitate to pay a huge price for him. Real Madrid’s revenues from club merchandise (shirts, caps et al) jumped 67 percent in Beckham’s first season alone. Suddenly, Real Madrid started earning more from tickets sales, television deals and other promotional activities. Its overall commercial income, which includes money deals from sponsors like Adidas, Pepsi et al now stands at £80 million a year. When Beckham was with Manchester United, it was the richest club; today it’s Real Madrid. This is the “Beckham effect” and marketers & merchandisers are loving it.Yao Ming, the very popular Chinese basketball player, was purchased by an American basketball club. The reason? They had no reach or influence in the Asian market and Ming could help them get it, for soon after Ming’s transfer NBA (National Basketball Association of America) opened merchandise stores all over Asia. Looking at NBA’s success, Seattle Mariners purchased Japanese National Baseball player Ichiro. Tourist flow from Japan has increased significantly to Seattle since then. Not to mention the fact that Ichiro merchandise happens to be one of the top selling merchandise in the league!
in its opening weekend. However what’s more spectacular is the fact that it set a new standard for movie merchandising. The children went crazy buying everything from its pyjamas to lunchboxes to alarm clocks to bubble gums – whatever was on offer. You guessed it… the movie was “E.T.”, which made $1 billion in merchandise revenue alone.Merchandising is developing into a big money spinner, which can’t be ignored any longer. Think of it, Spiderman alone accounted for some $132 million in merchandise revenue last year. Saawariya might not have worked well at the box office inspite of Ranbir Kapoor’s “towel-tease-act”, but Big Bazaar is grinning. Saawariya branded white towels did better sales than the movies weekend box-office ticket-sales. A successful movie means millions but much of this money comes not from ticket sales or even video rights but from licensing and merchandising – more so in the animated ones. Look at how intelligently Warner Brothers used its DC Comics characters Batman & Superman. Before 1989, Batman movies averaged at less than $120 million a year in merchandising revenue. Since 1989, the company has sold more than $4 billion in Batman merchandise.Not just movies, merchandising seems to work well for a whole lot of other businesses too. Today it’s become an invaluable marketing tool. It helps increase the brand exposure.
business, which attracts people of all age groups, class, colour & gender alike.Teenagers have always been huge fans of sporting merchandise; wanting to wear their favourite player’s jerseys. Nike made fortunes with its Air Jordan range; Adidas and its Greg Norman range of golfing accessories are a hit among the middle-aged. Merchandising is a reflection of the passion the fans feel for their stars. When Britney was at the peak of her career, her merchandising sales averaged $150,000 to $170,000 for each night of her American tour. Many artists are using this to quickly leverage the height of their fame. Jennifer Lopez has her own clothing line, her own perfume brand, which does brisk business for her.The Indian Premier League (IPL) is hoping to generate the same amount of fervour as football clubs of Europe or the English Premier League. They are hoping that IPL merchandising will catch on too. So Videocon, whose brand ambassador is Shahrukh Khan, plans to retail Shahrukh branded T-shirts, sunglasses, travel bags et al in its retail stores like Next & Planet M., Shopper’s Stop, Reliance Retail too are working out plans around IPL merchandise.Great ideas, popular faces is what merchandising is all about. After all, Harry Potter is not just a popular book series, which made its author J. K. Rowling a billion dollars, but it’s also a toy-merchandising machine, which helped the toy company Mattel sell Potter paraphernalia worth $150 million, it also helped Johnson & Johnson sell band-aids and cologne!
line of fire once again. Having lost the ever-famous video of man’s first step on the moon, causing speculations about the theory of the moon landing hoax last year, guess what they’ve done now! They have purchased a Russian built toilet system for a whopping $19 million for the International Space Station (ISS), claiming that it was cheaper than building their own from scratch. The expensive toilet will be installed on the American side of the ISS in 2008, while the Russian half will have to make-do with the old system only. This is part of a larger $46 million deal that NASA signed with Russia’s RSC Energia. The space station toilet physically resembles those used on Earth, except it has leg restraints and thigh bars to hold astronauts down. A NASA spokeswoman claims, “It’s like a miniature municipal water treatment system.” The system is similar to the one used at the space station currently, except that new one will be able to recycle urine into safe drinking water. Eeks! About $16 billion of the American taxpayers’ money goes to NASA’s funds each year and hey... here’s how NASA has chosen to spend it. And if the Russian built space toilet is similar to the one already in use on the space station, they could just as well have improved upon the design they already had in use, isn’t it? Why buy a whole new system anyway? They surely wouldn’t be designing it from scratch if they already have one in service for sure! Well, the $19 millions are already spent, so no sense in arguing. NASA is NASA and NASA puts its funds in things they want. That much money for a highly engineered toilet, but one that 99.9% of the world population will possibly never ever use! Welcome to planet Earth...
to it, have been incessant price cuts, a tactic the Chinese customers have actually fallen for, hook, line & sinker. By reducing average voice revenue per minute by 19.8%, the company was able to increase total minutes of voice usage by a whopping 230%! The company has also been successful in capitalising on the VAS space. Revenues increased by 35.5% to touch RMB 41.91 billion. Colour ringtones & MMS were stellar performers, rising by 90.3% & 76% in revenues respectively. While detractors may condemn its monopoly, the fact remains that China Mobile is proving to be quite adept at innovating business practices to retain leadership & profitability. And with the 2010 Beijing Olympics just around the corner (China Mobile being the official mobile services provider), its dominance over the Chinese consumer mind space would be just about complete.
ramids have false bottoms? Not really, though one could indeed get that impression if one analyses the rising fortunes of China Mobile Ltd.. The company, is clearly riding the crest of China’s telecom boom, with a virtual monopoly over the sector. Recently, the company announced its results for H1 2007, and posted a fabulous turnover of RMB 166.6 billion (y-o-y rise of 21.6%), and profits attributable to shareholders of RMB 37.9 billion. Moreover, the growth in subscriber base is on a consistent upswing showing 21.4% growth y-o-y to reach 332.38 million, a commanding market share of 68%. Stated a confident Mr. Chairman, Wang Jianzhou, “We are adept at leveraging our innovations to face changes in the business environment.... In the second half of 2007, we will continue to focus on exploring rural markets, expanding VAS & optimising our network....” Rural markets have been at the core of China Mobile’s strategic reorientation, as urban markets of China gradually started approaching saturation. Half of the new subscriber additions in H1 2007 came from the rural markets.
