Having undergone a complete overhaul over the last year, the agency is treading new grounds on its big leap ahead; 4Ps B&M gets the inside dope
 
In January last year, when Dentsu Global decided to buy off Sandeep Goyal’s stake in their three advertising companies for a reported sum of Rs.240 crore, it expectedly took adville by storm. To this day, the deal remains one of the biggest stake sales in the advertising industry. And as many industry veterans called the deal highly overpriced, they were also voicing in the same breath that Dentsu had become what it had on the back of Sandeep Goyal only. With an investment of roughly Rs.10 crore from each founder in 2003, the agency reported revenues of Rs.200 crore in the first year of operation itself, which, by the end of 2010, grew to Rs.1,200 crore. So naturally, the exit of Sandeep Goyal could not have been an easy one. Add to that, the agency saw the subsequent & sudden departure of several top management members, creating a huge leadership crisis. But this wasn’t the only setback that the company suffered back then. The buzz within the industry that Dentsu Marcom was losing its creativity was getting stronger. It was possibly for these reasons that many of the existing clients of the agency either put their business open for alternative pitches or did not give them any new brands. With such monumental problems at hand, finding a successor to Sandeep Goyal could not have been an easy task.

However in June 2011, when Rohit Ohri acceded to the position, the ball of change began to roll. Soon after joining the organisation, Rohit quickly ascertained his priorities – to get the right people in the organisation and to enthuse creativity within the existing team. Between June 2011 and now, the agency has been on a hiring spree; both at the top and at the junior levels; having hired over 23 new people from a total of 63 employees, and there are plans to get more. Besides Rohit, the other senior executives including Titus Upputuru, the National Creative Director, Narayan Devanathan, the National Planning Head, Sunita Prakash, Vice President and Harjot Singh Narang, the Delhi Branch head, have all joined the organisation within the last one year, thus forming a completely new management team. However, what was a bigger challenge than forming a new team was the second priority – reinvigorating the creative environment in the organisation. But as the saying goes, when one door closes, another opens up. Something similar happened at Dentsu Marcom too. While the sudden departure of the senior management had left a crater within the agency, it also gave them the option to start afresh and to give the agency a whole new innings.

If you were to visit the agency, there’s little chance that you would be able to sense the turmoil the agency had been through over the past year. The office, done up all in white, has interesting stuff lying around including water guns (unloaded, thankfully), skytrooper masks and African idols. There’s music to add to the melee, with in-office cricket/football available for any employee up for the ask. Clearly, the bigger intent in all this has been to push forward the fun-element into the office environment. Of course, any agency plumping its creative front is expected to embrace a bohemian philosophy. But Dentsu is evidently paying more than lip service to this issue. One big plus from this effort has been that the newly hired top management bonds quite well. In the world of killing office politics, there’s quite some value in the previous statement.
 
Every morning, the three vertical heads, Narayan, Titus and Harjot, huddle up at one of the corner seating areas (note: never inside a cabin) to discuss the latest office affairs. Through this, not only can they easily update each other with the latest developments concerning the agency, but also can set the agenda for the day. For them, this informal chat session – coupled with home cooked food, they insist – is the perfect beginning to the day. It’s an example that they’re trying to set for each and every employee of the agency – about how to be motivated and excited about work, yet not lose the fun, trust and team work quotient.

Did we mention the ice cream vendor with his ‘thela’ whom we crossed paths with on the 10th floor? That’s the kind of impact that hits one in the agency. Every success is celebrated substantially and expansively too. The ice cream vendor, for instance, was part of festivities that were being held on the culmination of an extremely hectic work schedule spanning more than two months, during which period, many of the employees spent several days and nights consecutively in the office to meet some deadline or the other; a consequence of having landed seven crucial deals within a period of four months.

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Product and Brand Clutter is Forcing Auto Companies to Rethink Marketing Strategies

The indian passenger car market has visibly reached a stage of perpetual flux for both sellers and buyers. 4Ps B&M elaborates on the key marketing trends set to shape the future of indian highways


In one of the first few marketing campaigns of significance in the history of the Indian automobile industry, Maruti Suzuki tried to position Omni as a passenger vehicle. Executed by Hindustan Thompson (now JWT) in 1989, the campaign – which was shot in Maruti’s factory premises in Gurgaon and featured the then renowned model Malvika Tiwari – focused only on the print media. The company found that the looks and size of the product were giving it a rather commercial appeal and hence, decided to come up with this campaign. However, many in the industry opposed the idea of a marketing campaign, as there was no real competitor for the company then.

With over 19 passenger vehicle manufacturers operating in the country today offering over 135 products to the Indian consumer, the industry has transformed both in terms of volumes and stature. The competition has increased by manifolds compared to the days when Maruti 800 was the only practical choice available to the consumer. Just three years back in 2008-09, Maruti Suzuki held over 52% share. But its market share has since come down to 42% in the passenger car segment. Players like Ford, Volkswagen, GM, Nissan, Renault, Honda and Toyota have launched a muliti-pronged attack on Maruti’s bread-and-butter small car segment in the recent past. Last year’s SIAM report also reveals that market share of small cars was 47% of the total market in 2011; making it the first year when small cars accounted for less than 50% of total passenger car sales; showing the extent to which market dynamics have shifted.

The new players have already announced their bullish plans for the Indian market, hinting towards the intense dogfight for market share that will be seen in coming times. This is reflecting in advertising spends as well. As per the Adex report for January-September 2011, the automobile sector was the sixth largest spender on TV advertising with a 4% market share and cars were the fifth largest product category with a 2% market share. As far as print is concerned, the segment grew by 36% during January-September 2011. Cars ruled the charts as compared to other product categories in the industry with 67% market share followed by two-wheelers with 13% market share.

While the 1980s didn’t need marketing, the current decade demands that players not only have a marketing strategy, but also keep it sharply focussed with the customers and the competition in mind. Otherwise, the margins for error are lower than ever before and one can easily get caught in the great Indian traffic jam – that is, in a clutter where prospects for growth are seriously compromised. 4Ps B&M analyses some contemporary out-of-the-box innovations by Indian auto majors and why the new paradigms being witnessed are set to reshape auto marketing in the years to come.
 
Experience Counts

Over the past few years, the ways to communicate with the consumer have changed. With new channels like social media and experiential marketing, automakers are trying to make the consumer experience more engaging and interactive to build a stronger brand connect, rather than going for just plain vanilla TVCs and print advertising. “Usage of such platforms makes the consumer experience with the brand more engaging and interesting. The Ford stall at the Auto Expo used various interactive applications to create an impact, which is remembered by the consumer,” affirms Michael Boneham, Managing Director, Ford India. These efforts were visible during the recent Auto Expo. Apart from Ford, Mahindra, Hyundai, Maruti, Land Rover and Renault among others also used experiential media integrated with social media at the event with a view to build a strong connect with the consumer. “The idea of executing a successful experiential marketing campaign is to make the experience of the consumer more engaging and at the same time, ensuring that the message of the brand doesn’t gets diluted,” adds Marc Barrett, CEO – Asia Pacific, Imagination, an agency that has created experiential campaigns for companies like Ford, Land Rover and Renault in the recent past. Players like Maruti Suzuki, Hyundai and Volkswagen are spending 8-10% of their marketing budgets on digital media alone and are looking for newer and better ways to engage. “Each and every market is unique in its very own way and India is no less. In fact, the ways to communicate with consumers change with the media consumption pattern of every market apart from many other things. For instance, Indian consumers are very much available on mobile and the market is way ahead as compared to many markets in terms of mobile penetration,” says Christopher Dahlin, Director-Marketing, Volvo Car Corporation.

It is not only digital, which is changing. Even traditional mediums like TV, print and OOH are witnessing a change in the kind of advertising being done. Volkswagen’s roadblock in the Times of India, the speaking newspaper, Polo cut and other clutter-breaking campaigns have pushed up brand engagement to impressive levels in a short span of time. The ‘Swap your drive’ campaign from Ford India is another brave campaign, which encouraged Indian customers to swap their car for a Ford car for a week and then give detailed feedback on their experience with the car. Companies are willing to take the unconventional routes more often than not. “Our marketing strategy is very different. We make a nation-wide impact via print and then go selective on the TV part complemented by OOH and digital. Our marketing budgets are not huge, although they look like they are. We are not even in the top 10 spenders from the automobile category,” clarifies Lutz Kothe, Head – Marketing, Volkswagen Group Sales. There is a clear need to refine strategies for product launches too. Normally, awareness and recall is at its peak during the launch phase of the product. But it goes down with the falling interest of the consumer. Rather than focusing only on the short span in the pre and post launch period, auto marketers are ensuring that media spends are evenly distributed over a long period of time towards different channels to ensure high recalls & sales. Ford has been adopting this approach of late globally and the results have even surprised their top brass.

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Another round of comparative ads is on, this time between media giants. Does this oft deployed tactic actually work in favour of brands?

Another classic, no holds barred battle is brewing in the advertising space, where hitting ‘below the belt’ becomes a question of tactical, rather than ethical relevance. The battle is being fought for supremacy over the Chennai market, and the opponents are India’s leading newspaper brands – The Hindu and the Times of India. In an attempt to garner attention and awareness for its 4-year old Chennai edition, Times of India delivered the initial blow. Going by the Times of India’s advertisement in question, the people of Chennai are subscribing to a newspaper that is so dull and boring that it makes you go to sleep, as depicted by the sleeping man amidst the slow moving police drill or atop the political cavalcade. The attack, it seems, hit The Hindu where it hurt, and the latter responded in kind. Its campaign, which runs across print and television mediums, attempts to highlight the lack of awareness of its rival newspaper’s readers by showing various clips where the rival newspaper’s readers are asked quite simple general knowledge questions – none evidently is able to answer. Though the ad does not openly point out the giant, the silent mouthing by the featured individuals of their choice of newspaper makes the elephant in the room quite visible.

The country has been witness to numerous comparative ads over time, and undoubtedly, these ads are often fun to watch for viewers. But does directly targeting competition help you or leave you ill disposed?

In December 2006, the New Yorker quoted a 40 year study that documented that 66% of companies which placed more emphasis on defeating competition and getting market share than primarily on increasing profits, went out of business. A much cited analysis (on data spanning 45 years) by Dr. J. Scott Armstrong (Wharton) and Dr. Fred Collopy (Case Western) concluded that “firms should focus on profits, and not competition.” Even the classic Blue Ocean strategy authors Drs. C. Kim and R. Mauborgne of INSEAD repeat the rhetorical, yet powerful statements: “Stop benchmarking the competition”; “Turn your attention away from competitors”.

But what about our Indian markets then? P. S. Mann, Creative Director, RKS BBDO, feels targeting your competitor doesn’t work. According to him, consumers are more intelligent than they are perceived to be and therefore they do not base their buying decisions based on what they see in advertisements. He believes that even if the competing brand gets a negative image, the publicity won is enormous. Mohit Ganju, CMO, IndusInd bank, feels that comparative ads do not benefit anyone since they leave the customer confused, and while these ads create a lot of buzz, the noise surrounding them stops customers from taking a final decision.
 
When talking of comparative ads, the cola brands cannot escape mention. Pepsi and Coca-Cola are up there among the leading brands that made this concept popular in the Indian advertising world. Thums Up vs. Pepsi (Akshay Kumar’s car accident ad and the followup spoofs, 2008) and Sprite vs. Mountain Dew (The Do jhaadhi ke peeche spoof of Sprite, 2007) are popular in marketing folklore. So intense has been their battle that it even reached judiciary, when Pepsi took Coca Cola to court over their spoof where cricketers portrayed in a Pepsi ad were called monkeys (‘Don’t be a bandar, drink the thunder’ went the punchline). One problem with comparative ads is that they prove to be a whirlpool-like trap; where once a brand starts to fight, it has to deliver blow after blow when the opponent responds, or else accept defeat. Therefore they often turn out to be highly expensive ventures and should be undertaken by brands with fairly deep pockets. Moreover, some battles are inconsequential, whereas others have winners and losers. The Candico Mint-O campaign that positioned itself as ‘All mint, No hole’ to counter Polo’s ‘Mint with the hole’ campaign, was a brilliant concept. But the company could not sustain the brand for long and Mint-O finally was sold off to ITC.

A case in point when it comes to such campaigns going overboard is the billboard war between Audi and BMW, which began with Audi displaying its vehicle with a confronting statement saying, “Your Move, BMW”. It was followed by BMW putting up a billboard next to Audi’s saying, “Checkmate” with its car below it. Audi, not accepting defeat, replied by putting yet another billboard next to the two previous ones, with the statement - “Your pawn is no match for our king”. Below it was the photograph of its concept car. Heights were reached when BMW, not finding any more billboards to buy, brought in its inflated air balloon to place above the existing billboards, with the statement, “Game over”, above the picture of it’s F1 sports car. That marked the end of this battle, but the war wages on to this date.

This may be short if one goes by the standards of some other landmark campaigns. One of the longest running series has been the Mac vs. PC ads, where Apple continuously and openly derided Microsoft’s successive operating systems and the brand Microsoft was represented by a guy who looked like a far bulkier looking version of Bill Gates. While Microsoft kept responding to the campaign with ads of its own, Apple ran 66 ads between 2006 and 2010, and a general consensus is that Apple gained much more in comparison.

Something similar seems to be taking place in the current battle, with TOI coming out with a new advertisement, in response to (The) Hindu’s campaign that says, “Congratulating the competition for finally waking up to the Times of India”. Clearly, the brand recall is up for both brands in the fray – this very article being evidence enough of that. Yet, should not these giants give at least a considerate ear to international research that forecasts negative returns for companies focused on anti-competitive marketing? Well, before you say yes, the fact also is that Indian markets are quite unique and need not behave critically like their Western counterparts. The Indian consumer purchases products based on quite uniquely different parameters and that may well work for such anti-competition marketing campaigns. We’ll keep watching, and reporting (and by the way, did you hear about how our chief competitor A_ Age goofed up on its statistics big time?).

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Ferzad Palia, Senior Vice-President & General Manager – English Entertain-ment, Viacom18 talks about the group’s new venture comedy central

Expanding Viacom18’s English entertainment portfolio, the group is bringing popular foreign comedy channel Comedy Central to India, of course with a promise to spice it up with some local flavour. On this occasion Ferzad Palia shares some insides of Comedy Central with 4Ps B&M and explains how Viacom18 plans to maintain its leadership in the Indian entertainment industry.


A large part of Indian audience base still enjoy watching Hindi comedy shows. What prompted you to bring a full-fledged English comedy channel to this market?

We realised that there is a large chunk of urban audience who want to see more evolved comedy shows and were reaching out to various platforms to find it. With Comedy Central India we bring world’s biggest 24-hours comedy channel to India. We did an extensive research with an agency and found out that the urban audience who is under so much stress needs something that offers a genuine laugh and that is the philosophy of Comedy Central – Laugh it Off ! We want to offer them simple laugh, even if they do not know what the serial is all about, they are going to laugh. We tested the shows, the concepts and it turned out to be very positive for us. Our idea is to deliver clever and disruptive content to our viewers; titles that have been handpicked from across the globe, especially for India. We are showing mix of all genres ranging from sitcoms to sketch comedy, British comedy, stand-ups and gags, among others.

It is interesting to see these days that a lot of focus is given on promotional activities. How significant is this factor for a new channel like Comedy Central, or for other channels under Viacom 18?

We believe in creating brands and not just channels. If you talk about MTV or VH1, the channel and all its programmes today are brands that have a certain value attached to it. Yes, the first and foremost thing with Comedy Central is its channel, but we do not want to be bound in its limitations. Here, we would be doing a lot of merchandise activities, something to do with the characters and taking them everywhere, we would be exploring the whole gamut of comedy. There are a lot of LIVE events in the pipeline too. Through these we are providing a stage for Indian artists who want to groom their talent in English comedy. You can say we are leaving no stone unturned to establish Comedy Central as a ‘brand’.

What would you cite as the biggest USP of the channel? How are you going to differentiate your channel from others in the same block?
The fact that we bring some of the world’s best all time comedy shows to one channel is the biggest USP of Comedy Central. Shows like The Daily Show with Jon Stewart, South Park, Saturday Night Live, 30 Rock, The Office, Seinfeld, The Wonder Years and That 70s Show are shows people yearn to see. We have also added Indian colours to the channel with shows like Kumar’s at 44. The biggest difference that sets us apart from Hindi programmes is the language and both formats have their own share of viewers. Our 80-85% of the target audience lives in the metros who fondly watches English comedy. So I would say we already have a distinguished audience for the channel. And since, it is a 24-hour comedy channel, one doesn’t have to wait for a particular time slot; whenever you put on Comedy Central you know you are up for a laughing session.
 
A lot of media houses are feeling the brunt of an erratic global market. How has it influenced Viacom18’s business?
Not much. All all our channels have performed well and businesses in 2011 have been above expectation. I can say that we have not faced a bad time like many other channels. All our brands are in the leadership position, be it in the General entertainment or English segment. And we expect to maintain the supremacy in the coming years too. All Viacom18 channels in India are doing extremely well and we’re confident that Comedy Central too will carve out its own space within no time.

Beside the conventional platforms for marketing, what different strategies are you planning for Comedy Central? What are your plans with regards to distribution?

We are doing massive through-the-line marketing across TV, print, outdoor, radio and digital. Our plan will involve strategic partnerships with lifestyle touch points, the target audience frequents like coffee chains, theatres, clubs, gyms, salons, shopping destinations and other hangouts. A lot of focus will be given on Below-the-Line activities. You will get to see us at unusual places, where channels do not opt to reach out to their target groups. For example, one can see Comedy Central at a chemist store or on a doctor’s prescription pad. We are saying look at the funny side of life. There are so many upsetting and annoying things happening around, so we suggest switch on Comedy Central and laugh it off. Social media is another space we are widely exploring. A large number of our target audience is active social networking site users, so it is important for us to have presence on Facebook and Twitter.

The distribution side is very well taken care of. We are available in approximately 20 million households in seven metros – Delhi, Mumbai, Kolkata, Bangalore, Hyderabad, Pune and Ahmedabad through digital cable, analog and DTH. And this is an adequate number for a kind of channel Comedy Central is.

If we talk about television TRPs and the whole mechanism of it, what according to you are the weaknesses in TAM research?
Well, to answer this candidly, already there has been a lot of discussion where we talked about the relevancy of TAM ratings and its methodology. TAM’s criteria has often been questioned by television fraternity pertaining to where these sets are placed and how such a small number out of millions of households watching television can give us a fair picture of the number one GEC or news channel. But then I would say there is no point in taking digs at the mechanism of TAM because TAM’s weekly result is the only medium for us to know the trend. So, it does show an overall trend going on television across various genres and it definitely helps in gauging audiences’ mood and sentiment. Since, it is the only system available for us to know a broad trend and details of viewers’ likes and dislikes, talking about TAM’s mechanism often becomes redundant and we largely believe that the TAM’s result are credible.

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Since expanding its footprint globally, the Italian coffee retailer has been making big investments in India and is opening a new line of coffee stores.

From Barista to Lavazza India, your operations in India have gone through quite a few changes. How do you see the brand evolving in the days ahead?

The way we have envisaged our business model is different from the traditional café management. We have introduced shops which are franchise-owned or managed directly by us. Lavazza entered India in 2007 when it acquired Barista (based in Bangalore), and Fresh & HonestCafée Ltd (based in Chennai). Over the past four years Lavazza has been in the process of consolidating its business. Also, we aim to further enhance our share in the dynamic Indian coffee market. Today, the Lavazza logo is present on all the three brands (Barista Lavazza, Fresh & Honest, Lavazza Espression) owned by the company.

Lavazza Espression is a completely new chain you’ve started. What’s the idea behind its launch, considering you already own Barista Lavazza, which you could have extended?

If you look at our Italian model, we never felt the need for a proper coffee chain. In Italy, Lavazza is mainly served in bars. But outside of Italy, the tradition of coffee drinking is totally different. So we felt the need to showcase our products and offer international consumers a standard experience of Lavazza in terms of environment, menu and products. Lavazza Espression is targeted towards those who like to experiment with new tastes, and share an affinity for the European way of life. Starting in 2007, we now have over 30 Lavazza Espression stores internationally, in cities like Barcelona, Turin, Dublin, London, Shanghai, Beijing, New Delhi, Chicago et al. We have opened our first Lavazza Espression shop in New Delhi, and plan to cover all the key metros in the next 12-18 months. Espression’s USP lies in innovation in the product’s offer and its original creative environment, marked by exclusive and very modern design.

What is your overall investment in the Indian market?
Since 2007 when we started in India, we have invested close to Rs. 600 crore in acquisition of Fresh & Honest and Barista. A large part of that money will also be invested in a new factory we are setting up in 7-8 months time on the Andhra Pradesh-Tamil Nadu border in Sri City, for producing roasted coffee.

Starbucks will soon launch its operations in India? Is that the reason for your new international chain?
We have an advantage over Starbucks in terms of making our first move in India in 2007. So we are no longer a newcomer to this market. Espression would have come here anyway, regardless of Starbucks coming here or not. Competition will only help the coffee culture grow in India. The market potential is huge and still very much open. Just to give you a perspective, in India the per-capita consumption of coffee is just 60 grams, while it is 5 kg in Italy, and the ratio between coffee and tea consumption is 1:7. So there’s huge growth potential.

Where do you place yourself in terms of increased competition in this space?
Right now CCD is the biggest player, and anyone who comes to India will have to face them. But we are not fighting any battle right now. We are positioned in a different space, we are not interested in numbers like opening 3,000 coffee stores around the country. For us coffee shops are a way to reach consumers. We are not dependant on it for business. Like CCD, Starbucks are the masters of coffee shops worldwide, they stand for the coffee shop business. For us it’s different, our focus is more on the retail side of the coffee business.

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Café coffee day, the 1,200-strong largest Café chain in India is targeting the youth segment and growing the market in the north to expand its business.

Though café culture is slowly catching on, coffee consumption is still very low in India in comparison to tea intake. What are you doing to promote it?
Cafés are acting as facilitators for coffee consumption. We are trying to ensure a good experience for our consumers, which they can take home, and that is how café culture will grow. If they don’t like the experience they are not going to take it home, and that’s where we are focusing on with our more than 1,200 cafés. Through the cafés we are trying to promote a coffee-drinking culture among people who are young at heart, and like to experiment with their tastes. We are also the second-largest exporter of coffee from India, which is the fifth-largest coffee producer in the world. So this whole ecosystem we have created over the years is what will perpetuate café culture in the country.

What’s the marketing strategy you are following to woo consumers and promote your Café Coffee Day chain?

We are the largest aggregators of youth in the country. We don’t do TV or press ads. Our 1,200 cafés are our billboards, and the biggest communicators of our USP. Besides, we use the digital medium aggressively to reach out to our target audience, which is the youth. We have a big presence in social media with over 1.1 million fans on Facebook. The residence time per person in our cafés is about 45 minutes to an hour. So during that time there’s also an opportunity to communicate with them subtly. The look and feel of the place, the service that you offer, the ambience, those are the things we use to communicate what CCD stands for.

What coffee-related products you offer to create the right environment?
In coffee we have premium offerings like French Press. And then we have lots of coffee powders. One that we have recently launched, about seven months ago, is called Drizzle. Here you have to just pour hot water over the coffee powder to prepare it, and it’s quite close to instant coffee.

Starbucks has announced plans to launch its India operations, Lavazza and Costa Coffee are getting aggressive by the day. How does CCD react to this growing competition?

Yes, there will be competition. But the Indian market is big, with a lot of untapped opportunities still. We would like the industry to grow and more players will help achieve that. Competition will create new benchmarks, and there will probably be new learnings for us. So far, most industry benchmarks have been set by us.

As in-home coffee consumption grows, that will be a big market to tap. What are your plans to boost retail of roasted coffee and beans?

We have been growing coffee since 1860. Our coffee is entirely grown in our fields. Some of the best people in the coffee industry are working with us. So we have the expertise in that space as well. As far as the growth strategy is concerned, there are two areas in India to look at. One is the coffee-shadow region, which is North India, and the coffee-strong region in the South. In the coffee-shadow region we are trying to promote coffee culture through our cafés and vending machines, which are driving out-of-home consumption. Besides, we have another subsidiary – Fresh & Ground – which looks after the retailing business of coffee beans. The major retailing market exists in the South, where in-house coffee consumption is high. As in the South, we hope that in-house coffee consumption will grow in the North in the future. And then we will have a strong retail opportunity there as well.

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What is the general scenario with respect to succession planning in the advertising industry?
It depends upon individual agencies. The truth is that the advertising and marketing environment is changing rapidly. So frankly, one can plan three years ahead. Anything beyond that is probably not practical. If you look at major global networks, there is a huge question mark on how the industry will evolve. Should the new chairman be from the traditional advertising space? Should he be from digital space? Should he have certain special skills? Or should we look for someone who just has damn good management talent? Therefore, because of the rapid change in the media environment, for anybody to be able to forecast the width of exact skill sets that would be needed for the next line of leadership is a challenge. Even if you look like a company like Pepsi which has a very strong management bench, they’ve revealed that they are looking for someone from a totally unrelated industry. Having said that, succession planning is important. One should certainly have a plan with an understanding of where the environment is headed. It is important to have contenders for succession. It’s fluid who will succeed Sir Martin Sorrell at WPP. It’s fluid who will replace Maurice Levy at Publicis. And that just reflects into structures.

Do you think this sort of a scenario is justifiable or should there be much more planning going into it?
In a stable environment, you work with firm plans. In fluid environments, you work with scenarios. And clearly, today we’re working in a fluid environment. Look at the amount of change that has happened over the last five years. We couldn’t have forecasted the magnitude of change that was about to come. Each one of us does our best to forecast it. But we realise that beyond three years, such forecasting isn’t very productive.

Does such an environment create a kind of uncertainty for people who have been loyal to a particular agency and have been expecting to end up at the top?
No. It rather creates opportunities. The only thing is the possibility of future shocks. Now the future shock is here and that fundamentally changes the nature of how you manage people and how you plan for them.

So if a top executive quits from an agency, do you think there is ample talent to replace him?
I think so. The talent might not have been life long at that ad agency. He might not be the senior most person, but is definitely a person who is more suited for the job.
 
The quality of people coming in to the advertising industry has dramatically changed over time. The level of commitment is not the same as it used to be. Do you think this is true? If yes, what impact has it had on succession planning?
A number of changes have taken place. What has happened is that as I said, the media environment has become a lot more complex. So if you look at a CEO of what has now become a brand agency, if he had very strong training in building brands and particularly training in building brands through TVCs and good team management skills, I think he would be a prime candidate for an ad agency. Today, when agencies are searching for how to provide services full circle to the clients, it is not that clear that the guy who has managed to build brands through television advertising is the right candidate to handle the width of such responsibilities. The compensation environment is far less fixed. New skill sets have to be built. So even if you acquire talent in two areas, four other areas are still left. So you need higher management caliber talent.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2012

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

For More IIPM Info, Visit below mentioned Links

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 Proves Its Mettle Once Again....
Arindam Chaudhuri on Internet.....
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
Planman Technologies
IIPM Contact Info

IIPM History
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IIPM: Selection Process
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Despite its appeal as a high end fashion garment, the branded market for saris has only picked up in the last few years. But the metamorphosis is quite phenomenal, & two fairly recent developments promise to further up the ante

Okay, so what’s common between Mukesh Ambani and Manish Malhotra? Well, both have recognised immense business potential in tapping the market for the Indian woman’s most favoured attire – the sari. And they join an interesting coterie of established incumbents who are inculcating a strong brand culture into this hitherto unorganised market.

In fact, the intervention of branded players in the sari market has made a much more powerful impact than it seems apparent. According to an old study by KSA Technopak on the Indian clothing market (conducted in 2002), with about 197 million people buying saris on an annual basis, saris were the largest selling apparel item. A decade later in 2012, the sari market is extrapolated to reach an astonishing Rs.74 billion; with 40% of it to be taken over by branded saris (according to the KSA Technpak report, branded saris covered only 2% of the sari market in 2002). A decade back, branding of saris was done by a few national-level manufacturers such as Roop Milan, Garden, Parag and Nalli’s. But extensive branding or creating large retail chains was not a regular phenomenon. But now marketers are gearing up to create their individual sari brands and even getting into exclusive tie ups with craftsmen and weavers. Leading designer Satya Paul, for instance, has already created a strong national brand and players like Nalli Silk, which also has plans to rope in an ad-agency like JWT to come out with a slogan, are looking for newer ways to establish exclusivity. “A proper positioning is a must to convert a fashionable commodity like the sari into a brand. The existing unbranded market has not done that so far,” feels Sumeet Nair, MD, InCube Fashion, who’s working with designers on branding. According to CII, designer branded saris are now growing at a rate of 30% every year. In this increasingly dynamic market, two significant developments of late promise even greater upheaval in future.

The first is the well known and acknowledged disruptive influence of India’s most profitable private company. Last year, Reliance Industries Ltd. re-launched its Vimal brand and the company is also launching a mega brand extension into saris in 2012. Vimal was quite popular at one time for the old tagline, “A woman expresses herself in many languages. And one of them is Vimal.” This would now be replaced by a theme that would combine the traditional concept with a distinctly modern appeal.

The group is largely paying heed to corporate women as its target segment. But the biggest challenge in the corporate space is the largely unrivalled dominance of western prêt-a-porter. To combat those players, Vimal is resorting to ‘online marketing’ and will cash in on all emerging media to market saris in metros, especially for corporate women. Like their other ventures, Reliance will definitely play the volume game here. Hence Vimal saris would not be limited only to metros, but would also be marketed in smaller towns and cities.

The second disruptive change for the segment is the entry of a global luxury brand. The $29 billion Paris-based LVMH Group announced last year that it will roll out branded saris in India in 2012. While the financial model that LVMH’s private equity arm L Capital is following is a bit byzantine, the business model is reasonably clear. The ritzy retailer would be investing $650 million for a 25.5% stake in Gurgaon-based Genesis Luxury Fashion. Genesis will scout for craftsmen and weavers to manufacture exclusive saris.
 
According to Bernstein Research, India’s spending on luxury haute-couture was around €600 million ($777 million) in 2010 and out of this, a mere 2% was spent on high-end exclusive designer saris. LVMH, whose portfolio of brands includes Louis Vuitton, Parfums Christian Dior, et al; has the marketing skills and the know-how to pitch its products in the Indian high end market (it entered in 1996, & all its brands are present in the metros). The company firmly believes that the stark absence of high-end branded saris is indicative of the massive potential. Besides, LVMH’s saris would not be limited only to the domestic market. “Our investment and knowledge will connect craftsmen and weavers with the global luxury market and help them grow faster more profitably,” says Daniel Piette, President & Managing Partner, L Capital.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2012

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

For More IIPM Info, Visit below mentioned Links

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 Proves Its Mettle Once Again....
Arindam Chaudhuri on Internet.....
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
Planman Technologies
IIPM Contact Info

IIPM History
IIPM Think Tank
IIPM Infrastructure
IIPM Info

IIPM: Selection Process
IIPM: Research and Publications
IIPM MBA Institute India
IIPM Best B School India

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These platforms and interfaces have always been around us, but in 2012, they’ll probably become the most important marketing tools. Here’s our take on them.
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Android

The Linux based operating system from Google is your one stop solution to mobile marketing. Here’s how.
Convergence, as we all know is the future. Instead of watching TV or reading newspapers, consumers are increasingly spending time with the devices they carry around. And to get people to buy your product, you have to be where they are. With 700,000 Android devices being activated everyday as of December 2011 (Andy Rubin, Sr. VP Mobile, Google), every marketer should try and leverage the medium. If you haven’t yet, get hold of developers and figure out what you can do.

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Augmented reality (AU)

How you define it is not important, how you leverage it is.
To be honest, if you read the definition, you’ll think it can’t be used as a marketing tool. So to simplify, let’s just say that this technology is a bridge connecting the virtual and real world. This year, AU was used perhaps for the first time in India at the Auto Expo by Mahindra & Mahindra. A cheetah was created which visitors could see on the screen above the displayed XUV. The fun part was that people could also pat the animal. Although the activity had no connection as such with the brand, it did however create brand recall. The technology is nascent in the advertising field, but in 2012, it might just become an integrated part of the advertising mix.

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Gamification

This might not exactly sound like a marketing tool, but then, it is. And an important one at that.
Ever wondered why you get to earn points through apps like Foursquare for just recommending the service to your friends? If you thought that it was just fun, then you better know now that you were part of a gamification process. These technique uses game design in order to increase engagement. Try the The Economist puzzle game on Facebook. Gamification is simple to implement, easy on the pocket and the trade offs are huge. With Gartner predicting that gamification will become as important as Facebook and Twitter for marketers by 2015, it’s worth a try.

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Facebook

Zuckerberg came, everybody saw and Facebook conquered.
When before in your entire career as a marketer did you hear about a car being launched on the Internet? Probably never. But the unimaginable happened in 2011when Ford launched the Explorer on Facebook. CEO Allan Mulally even went on to answer user questions on the Wall. The social network has 800 million active users with 50% logging in on any given day. If you aren’t there, you’re missing a huge opportunity. It’s no more about having a fan page, it’s about constantly interacting with your fans.

 
The world is not going to end in 2012. what has ended however are the usual brand wars that marketing pundits predict at the start of every new year. move over Coke vs Pepsi, the new kids on the block are raring to have a go...

January is the month of soothsayers; of crystal gazing about the year ahead; and motley predictions about life, love, career, family and even the end of the world (this one’s for the Mayans, the I Ching and the Bible, interpretations of which reveal that the date for Armageddon has been set down for 2012). But India is another story. Irrespective of the fate of the world, the start of the year has had politicians, bureaucrats, businessmen and even members of Team Anna going batty about what 2012 has in store for them.

For marketers however, the start of the year is traditionally more agonising and full of the unknown than others. The onset of January almost always sends marketing pundits in a tizzy fantasizing about better brand visibility and higher growth as the final quarter sets in. They may have frittered away the rest of the year planning big budget ads, events and contests to improve the bottomline, but January is when the winds get taken off their sail because the sales just don’t add up to the heavy duty marketing chutzpah. It could be because of the rising input costs, the falling margins, slow consumer demand or numerous other reasons that seem to be confounding the Indian economy right now, but it is there.

So this January has only seen the pressure on marketers go up. If bottomlines are down at the end of the third quarter, CEOs are demanding more action for better results before March 31st. And if bottomlines are up, then the bid is to raise the stakes and outperform in the third quarter perhaps for a mouth-watering incentive if you are lucky. Any which way you look at it, the beginning of the New Year will witness some exciting brand battles as marketers attempt to score a one up against rivals. The rest of the year of course will follow suit.

Interestingly, while some of the most eloquent brand wars have traditionally found shelf space in the FMCG market (recall the Coke vs. Pepsi shindig or the Surf versus Ariel standoff), the fast growing durables, electronics, automobile, financial services and media markets in India have spawned close battles in these sectors. What’s more, the brand battles of 2012 are special in the sense that they are unusual in their non-conformity. It’s not Maruti versus Hyundai or LG versus Samsung or Star versus Zee this year. Instead it’s a year where the old has given way to the new, albeit a little hesitatingly. Read on for the proof of the pudding is indeed in the eating...

SUZUKI VS VOLKSWAGEN
They say that the Indian auto market is one of the largest in the world. But clearly not large enough for two partners to stick together and do business. And that is precisely the story of cohabitants turned competitors Suzuki and Volkswagen (VW). Two years ago, VW acquired a 19.89% stake in the Japanese auto giant hoping to benefit from Suzuki’s expertise in the small-car segment and make inroads into emerging markets like India. But before the partnership could celebrate its second anniversary, Suzuki terminated the partnership late last year citing breach of contract.
 
How the end of this road will play out in global markets is anybody’s guess, but in India at least VW seems intent on having the last laugh. Taking advantage of Suzuki’s domineering presence here, the last couple of years has seen VW make quick gains in India. While Maruti Suzuki was busy resolving labour issues and streamlining production shortfalls, VW walked away with some of their market reach. VW commands only a 4.2% market share in India, which may seem miniscule in front of Maruti’s 41.42%. But experts agree that VW has gained the maximum out of the bad times that Maruti has seen over the past 12 months. VW’s deliveries to customers in India doubled to 111,600 last year even as Maruti Suzuki saw sales decline by 16.5% to 684,892 units between April and December.

VW’s aggression is indicative of the marketing mayhem in the days to come. Take product strategy. Volkswagen Polo competes directly with Suzuki Swift and Ritz while Vento competes with SX4. Going forward, VW is expected to bring its small cars like Golf and UP to the Indian market taking the battle a notch higher. “We currently have a very small market share in India but are hopeful of a 10% market share by 2018,” says Ulrich Hackenberg, Head - Technical Development, VW AG.

Suzuki isn’t sitting quietly either. With seven small cars in its portfolio, the company is now expanding to other segments. The premium Kizashi and soon expected Ertiga are testimony to the Japanese major’s renewed focus. The company is betting on its pan-India network to preserve its dwindling market share.

With Suzuki making every attempt to regain its lost market over the next 12 months, VW may well find it a difficult to lure Maruti loyalists to drive cars with a VW insignia. But then, upwardly mobile consumers may find it equally tough to resist VW’s German technology appeal. Look out for some subtle fireworks ahead.

HERO VS HONDA
It’s always been Hero Honda versus Bajaj and so when suddenly you end up just writing Hero Honda with an ‘and’ in between, nostalgia is bound to strike. Here’s another set of friends turned foes, who after walking hand-in-hand for 27 years, are now standing head to head in the Indian two-wheeler market.

For more articles, Click on IIPM Article

Source : IIPM Editorial, 2012

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

For More IIPM Info, Visit below mentioned Links

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 Proves Its Mettle Once Again....
Arindam Chaudhuri on Internet.....
Arindam Chaudhuri: We need Hazare's leadership
Professor Arindam Chaudhuri - A Man For The Society....
IIPM: Indian Institute of Planning and Management
Planman Technologies
IIPM Contact Info

IIPM History
IIPM Think Tank
IIPM Infrastructure
IIPM Info

IIPM: Selection Process
IIPM: Research and Publications
IIPM MBA Institute India
IIPM Best B School India

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