IIPM- News Articles

Tuesday, March 15, 2011

The Art of TV Advertising

“TV is the quickest medium but cannot hold the brand on its own,” are the very first lines that Sangeeta Sharma, Manager Marketing, South Asia, Lufthansa says, when we enquire about the reasons Lufthansa has stayed away from standard TV advertisements. The truth is, while trying to play the contrarian, Lufthansa’s marketing strategies have been based upon precise and up-to-date customer intelligence – the primary reason that Lufthansa, instead of relying on the time & tested mode of TV commercials, has rather preferred only that exposure to the TV medium where they could quantify the investment-response ratio.

One critical example is their selective sponsorship of CNBC All For This One Moment (presented by Shereen Bhan, who interviews corporate leaders), where – rather than simply paying up money for being associated with the programme – Lufthansa developed the content within the programme and tracked viewer response with help from CNBC. Few companies in India have the wherewithal to get into viewer analytics like this. In another example, Lufthansa has also been the first airline to use TV tickers in stock screens. States Punit Kapoor, AVP, MRM Worldwide India (which handles the Lufthansa account globally), “Our specific TG, the business travelers were used to seeing only stock tickers, but to see a Lufthansa ticker added to our brand proposition.” While the airline has shied away from TV advertising, they have not been averse to using tactical campaigns on radio and also branding via print & outdoor campaigns. Saket Sinha, Partner-Client Leadership, Mindshare (the media planning agency for Lufthansa) shares, “Lufthansa has grown over the years and the reason for such phenomenal growth has been sharp targeting and understanding of the consumer insights. The kind of media that we’ve chosen for Lufthansa is solely based on the marketing needs. We did not choose TV because TV gets into interruption rather than engagement.”

Late 2009, the carrier – which had completed 50 years of operations in the country – was voted “Best International Airline in India” at the CNBC Awaaz Travel Awards. The focus this year is, however, towards strengthening the carrier’s position in India as the leading European airline. In reality, with 49 weekly flights to seven Indian destinations, Lufthansa is clearly today the top European carrier in India. In fact, India is second only to United States when it comes to the number of weekly frequencies that the airline operates. So the job is not that tough apparently. But with an emphasized focus on new media, Lufthansa is additionally attempting to be a radical trendsetter.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2011.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM B-School Detail
IIPM makes business education truly global
IIPM’s Management Consulting Arm - Planman Consulting
Arindam Chaudhuri (IIPM Dean) – ‘Every human being is a diamond’
Arindam Chaudhuri – Everything is not in our hands
Planman Technologies – IT Solutions at your finger tips
Planman Consulting
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine

IIPM B-School
Arindam Chaudhuri
Rajita Chaudhuri
Planman Consulting

IIPM in the league of best management institutes of India.....

Tuesday, January 11, 2011

4Ps B&M brings the answers in this exclusive report

Though Akshay Mehrotra, Head-Marketing, Bajaj Allianz feels that when it comes to an intangible product like life insurance it is the trust factor instead of a brand that plays an important role in convincing an investor, he really does not hesitate in accepting the fact that in an overcrowded market, like the one they are in, it’s the strong and powerful brands that always have an edge over the others when it comes to choose one. And in industries such as Banking & Financial Services (BFSI), the brand sometimes is considered to be the representative and proxy for the credibility and reliability of the company.

Though there are critics who feel that the brand strength does not protect an investor when market tastes change, when competitors develop more effective business models, or when disruptive new technology displaces a product, the truth of the matter is that the same holds true for any other factor too that affects shareholders’ wealth. So do brands really matter to shareholders? The concluding answer is that in the new-age stock trading scenario, where market information is discounted within a few milliseconds, a brand’s existence or non-existence might not matter in the extremely short term. But it surely does over the long term, both directly and indirectly, as the brand plays a more expansive role as time passes.

NIGEL PIERCY, PROFESSOR OF MARKETING & STRATEGY, AND ASSOCIATE DEAN, AT WARWICK BUSINESS SCHOOL, UK
It’s a means to an end, not an end in itself
Investors should always exercise some caution before accepting management assurances that the strongest brand always wins

There is a lot of evidence that successful major brands constitute an important asset providing competitive strength and enhancing performance in the marketplace. For many buyers brand identity provides security in a purchase, it encourages repeat-purchase, & product recommendations. This alone underlines why the owners of a business should be looking closely and carefully at investments in branding and the results in brand strength compared to competitors. However, there is more to it. The smart investor needs also to be wary of the dangers of mindless expenditure on brands that create little value, and the underlying vulnerability of brand-based strategies.

Branding is a productive investment only if it builds value for customers and hence for shareholders. The brand is a means to an end, not an end in itself. Investors need to ask probing questions about whether management is prone to “blind faith branding”, which assumes that all expenditure on brands is productive expenditure. It is not. Investors should also be fully aware of the weaknesses of building corporate strategies around brands and exercise some caution before accepting management assurances that the strongest brand always wins. Most obviously, the more successful a brand, the more vulnerable it is to imitation and counterfeiting – imitation is the quite legal development of close substitutes by competitors, while counterfeiting is illegal but difficult to avoid. Management claims about the robustness of strong brands may exaggerate just how sustainable they are.

It is also apparent that traditional strengths of brand-based competition may be increasingly questionable in 21st century markets. Having the most valuable brand in the world did not protect Coca-Cola from a change in drinking tastes across the world or an anti-US backlash in some areas. The strength & value of IBM’s branding did not protect it from Dell’s direct business model in the 1990s or competition from cloud computing right now. The now-classic case is the emergence of generic (unbranded) cigarette products in the US in the 1990s.

Faced with loss of business to generic tobacco products sold in gas stations, the big brand owners did the unforgivable – they cut prices to protect market share. The investment community reactions was quite clear – if faced with competition the only thing you can do is cut prices, then that means brands are not worth much, and the question becomes where has the money gone.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

IIPM B-School Detail
IIPM makes business education truly global
IIPM’s Management Consulting Arm - Planman Consulting
Arindam Chaudhuri (IIPM Dean) – ‘Every human being is a diamond’
Arindam Chaudhuri – Everything is not in our hands
Planman Technologies – IT Solutions at your finger tips
Planman Consulting
Arindam Chaudhuri's Portfolio - he is at his candid best by Society Magazine

IIPM ranked No 1 B-School in India
domain-b.com : IIPM ranked ahead of IIMs
IIPM: Management Education India
Prof. Rajita Chaudhuri's Website

IIPM B-School
Arindam Chaudhuri
Rajita Chaudhuri
Planman Consulting

Monday, January 03, 2011

Exclusive Interviews from inside LG, Samsung and competitors

Now the dilemma comes when one has to place a bet on which of the two has crafted a better future for itself. In 2010, LG and Samsung collectively take up a lion’s share of almost 40% in the consumer durables market in India and have outclassed not only their Japanese cousins but also the Indian incumbents like Videcon, BPL and Onida. Interestingly, the entry strategy for LG on one hand was to establish its footprints into the interiors of the country and to play on volumes. Samsung, on the other hand, has always positioned itself as a premium player among the consumers. But today, the battle for the durables sector is completely paradoxical. In spite of the slowdown in 2009, the consumer durable industry grew by 20% and is still expected to reach a mark of $40 billion by 2012 at a CAGR of 11%. Having mentioned that, the moot question that arises now is - Who will win the race?

Off late, LG has been repositioning itself in India and harping on the strategy of aspirational branding from a functional perspective. Shin explains the logic behind this move as he shares, “The reason behind this step by the company is stiff price competition, which is taking place very fast and China made products are coming up. So we need to make products accordingly. We shouldn’t play in the red ocean and we should gradually get out of there (low priced products) so that things improve. The other rationale behind this move is that the resale values of LG products is high, the customer is always ready to pay more because of good quality. We have already experienced this from the mass marketing.” Samsung, on the contrary, is spreading out to price sensitive markets because of its low penetration levels. For instance, around 30-35% of company’s flat TV sales occur in Tier-II and Tier-III cities.

Besides the geographical dimension, another factor playing a crucial role in the cat-eat-cat competition among the two is the mobile phone category. As per an IDC report, out of the 100 million handsets sold in 2009 Samsung garnered the second slot with 7.7% of the entire pie while LG stuck to its third position at 5.4%. Clearly, Samsung has bolstered its position over the last two years by launching new products across all price segments and roping in a celebrity ambassador (Aamir Khan).

Another major differentiation between the two is their communication strategy. Vijay Uppal, CEO, Upfront Advertising puts forward the brand attributes as he exclaims, “In terms of the Brand attributes, I would say LG is more of a sales volume lead brand whereas Samsung is commanding a ‘qualitative feel’ in the customer’s mind. But both of these brands have been using a two track communication strategy. LG harps more on promotions, whereas Samsung is more attuned towards brand aspect.”

Tuesday, December 21, 2010

COST CUT OR CARTELIZATION?

But the verdict on whether the deal will pay out or boomerang will take this year at least. Prof. Timothy Calkins, Clinical Professor of Marketing at the Kellog’s School of Management, tells 4Ps B&M from Northwestern, “I suspect this deal will have little impact on media spending budgets, at least in the short run. By working together the companies will try to stretch the planned spending. I suspect the individual business units at the companies won’t adjust spending levels until it is clear precisely how much there is in terms of savings. Companies are aggressively looking for ways to stretch marketing dollars and this is one promising approach. I suspect we will see more companies teaming up to negotiate with the major media companies, particularly if this venture delivers real benefits”

The deal’s specifics include that a team of executives from each company will review plans and priorities, concentrate on common areas of spending in media apart from their other supplies and negotiate purchases on behalf of both companies. But the media planning of the two companies would continue to be handled separately. There are rumours galore that the advertising agencies of the two companies might also face the brunt of this deal despite repeated statements by the two companies that advertising budgets and decisions will be handled solely by the respective companies as earlier.

But early signs that the new terrain for the brothers-in-arms would be treacherous are already appearing. Recent rumours suggest that big media companies like Turner, NBC, Conde Nast and Time Inc. have all rejected the proposal by the duo to jointly buy time and space at sharply discounted rates ranging up to 50%. The networks might just be right on this one. Omnicom, the parent advertising giant whose sister firms like TBWA and DDB are the agencies for PepsiCo and AB-InBev respectively also handles PepsiCo’s media buying through its media arm OMD. OMD handles more than $13 billion worth of media budgets for a plethora of big and small advertisers in the US. If the deal has to work, not only will OMD lose its bargaining clout with networks, networks themselves will be risking the ire of their other advertisers demanding similar rates. “This program will have the biggest impact on traditional media outlets such as network television and print. Since everyone understands how to evaluate these vehicles, it is an easy place to go after savings. The deal could have a big impact on events like the Super Bowl, since both companies have been Super Bowl advertisers over the years,” says Prof Calkins.

But the biggest issue that might just end this tryst between the giants sooner than later is the culture collision. Both Pepsi and Inbev come with legacy baggage, and that would be a bigger worry than actually making money out of the alliance. Come to think about it, when did a puritan aficionado of white beer ever allow itself to be mixed with Pepsi and sold as a new combo?

Anchal Gupta

Tuesday, November 30, 2010

Technology has become the USP of many players in the banking sector

Today, electronic banking refers to the use of technology that allows customers access to banking services electronically – whether it is to pay bills, transfer funds, view accounts or to obtain information and advices. It refers to the electronic services that are made available to the customers through phone, personal computer, television and the Internet. Customers can perform banking transactions such as balance enquiries, bill payments, transaction histories, and transfer of money between accounts, obtain quotes and submit equity option and mutual fund offers without having to step into the office on the branch. Payments can be made in India in the form of cash, cheque, demand drafts, credit cards, debit cards and also by means of giving electronic instructions to the banker who will make such a payment on behalf of his customers.

Given all that, technology is actually helping the banks to reduce transaction costs and improve efficiency. The Reserve Bank of India (RBI) as the central bank of the country has creditably been playing this developmental role and has taken several initiatives for a safe, secure, sound and efficient payment system under electronic banking, as these systems are used by individuals, banks, companies, governments, etc. to make payments to one another. In other words, anybody who has to make a payment to any one else can use one or the other form of payment system to make such a payment for which IT enabled channels create a platform.

Clearly, technology has become the Unique Selling Proposition of many players in the industry as it facilitates innovations in all functional management activities – accounting and finance, production and designing, marketing and customer management, research and development activities, and so on. All these innovations have helped the banks to provide seamless, cost effective and world class services to Indian consumers at the same time from Kargil to Kanyakumari and Kutch to Kohima.

Prashant Singh, Vice President & Country Head – FOS & Agency, Royal Sundaram Alliance Insurance Company

Monday, November 15, 2010

Haven’t we had enough of it?

It can’t be that Lalit Modi did not know what he was getting himself into when he wrote those historical tweets on the micro-blogging site, Twitter, on April 12, 2010, revealing the ownership pattern of Rendezvous Sports Group, the owner of the Kochi team. He also perhaps knowingly revealed the stake owned by Shashi Tharoor’s ‘close friend’ Sunanda Pushkar. After all the brouhaha created, the dagger is now hanging over Modi’s head. While Tharoor has already lost his ministerial post, the IT Department is now digging out the hidden skeletons in Modi’s closet. The BCCI too is orchestrating the ouster of Modi as the Chief of IPL. So after all the mud-slinging, what remains of brand IPL? The current season of IPL is scheduled to get over on April 25, with semi-finals starting from April 21. So, it is unlikely that the splash of the dirty linen wash will have any impact on the ongoing season. With consumer hysteria on a high, putting stakes on the winning teams, the TV viewership will gain firm grounds in the last four days of the series. And then again, the sponsors of Mumbai Indians, Deccan Chargers, Chennai Superkings & Royal Challengers (the semi-finalist teams) will under no circumstances withdraw their support. Therefore, to say that the current hullabaloo has, in anyway, impacted brand IPL in the eyes of cricket-lovers in this season is a fallacy. But what happens after the IPL season is over? Who helps us get over the post-IPL tamasha depression? Ladies, don’t worry, Indian Idol is just around the corner!

Monday, November 01, 2010

JUVENILE SMOKE? NO MORE!

A US law, brought into force after 15 years, has banned the display of tobacco advertising to non adults. But the tobacco companies are not going to give ground so easily.

The law is yet another attempt in the world’s biggest tobacco products market to curtail the easily avoidable deterioration in health of coming generations. In 1964, the Surgeon General of the United States released a famous report that linked tobacco use with cancer and other diseases. This report led to laws requiring warning labels on tobacco products and restrictions on tobacco advertisements. In April 1970, US Congress passed the Public Health Cigarette Smoking Act banning advertising of cigarettes on television and radio. As such laws began to come into force, tobacco marketing became subtler, with sweets shaped like cigarettes put on the market, and a number of advertisements designed to appeal to children, resulting in increased exposure to and adoption of smoking among children. Then in 1998, the historic legal settlement between four major tobacco companies dubbed “Big Tobacco” and 46 US states, prohibited tobacco companies from selling tobacco products to children.

But, anti-smoking groups and public health organizations stand their ground and argue that tobacco companies, which spend $35 million on an average each day on marketing, have continued to direct advertising to teens and children in subtle ways. According to the Campaign for Tobacco-Free Kids, about 20 percent of high school students smoke. Children are a critical target population for anti-smoking efforts, with studies showing that 90 percent of smokers hooked on to it before they reached 18.

In fact, the secretary of Department of Health and Human Services, Kathleen Sebelius, recently stated in a press conference, “Every day, nearly 4,000 kids under 18 try their first cigarette and 1,000 kids under 18 become daily smokers”. The rules will “help our kids stay healthy by making it harder for tobacco companies to target them with harmful and addictive products”, says Sebelius. The retaliatory noises, however, have already begun.

In the first legal challenge to the new law, R.J. Reynolds Tobacco and Lorillard, the country’s second- and third-largest tobacco producers, argued that certain provisions violated their rights to free speech as per the First Amendment. The complaint was filed in Kentucky, the state with the highest number of adult smokers. The Kentucky court struck down a rule that would have limited advertising to black text sans graphics except in adult magazines or retail establishments open only to adults. The judge ruled that companies can use imagery and colors to communicate the purpose of the product and name of the producer. Such ruling allows, for example, Reynolds to continue use of a camel drawing in its advertising for Camel cigarettes.