Why do we hide?

What comes to your mind when you read the title? No, it’s not about ‘black money’ which people anyway will keep hiding whether you ban currency or change the currency. Few things about Indians you can’t change at all. Today, I am going to talk specifically about two products one of which is related to both male & female and other one is related to only female. These two products are purchased secretly and kept hidden from outer world.

Before I mention those products, I will mention few things about branding. I have been taught that brand equity is the value you add in consumer’s life, brand positioning is the acquisition of consumer’s mind’s space, brand recall is when consumer is able to recognize brand without all the hints or minimum hints. All these mentioned concepts relate with consumer at different touch points of consumer’s buying process. Take an example, consumer needs something, he sees an advertisement of a product which can satiate the need i.e. ‘brand positioning’. Now that consumer decides to buy it and add values to his daily life which comes with that specific product i.e. ‘brand equity’. Now consumer decides to repurchase it or recommend it to other people he needs to be in touch with that product with satisfactory reviews which happens after enough visibility of the product or brand name i.e. ‘brand recall’.

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We have 5 chemist shops in family so I have experienced this process for all the over the counter products but there are two such products which don’t actually follow the above mentioned process. By now you would have understood which product I am talking about, yes, you’re right. They are ‘Condom’ and ‘Sanitary pads’. What do you think how an Indian buys condom from chemist shop? If you start observing, you will understand how funny it is. I have seen people writing it in the form of prescription, few come covering their face, few send small children to purchase, few don’t speak anything- they just point to it and show the count by fingers whereas I have seen dew people murmuring something and asking for paper bag to cover it. Same thing happens with sanitary pads. The use of sanitary pads is lowest but that’s not our point of discussion today. While purchasing all the females behaves in the same manner the males behave while purchasing condoms. Important factor about the sanitary pads pack is always wrapped in black plastic bag or a newspaper.

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So the whole point of discussion is to ‘why we hide?’ My point is not to discuss why do we behave in certain manner when it comes to these products but from company’s point of view, Aren’t we doing something wrong in terms of placement of product? Why aren’t we targeting the fact that such products need more visibility for its served purpose? Take all other products, you will find that its visibility plays important role in the repurchase of that product. If we remove this taboo and start showing it to the world that I have purchased condom or sanitary pad because I need it. I think when this starts happening the category will increase as well as brands will grow to serve its sole purpose.

Happy Observations!

Food Startups – where do we stand?

It’s been more than year to launch of my startup ‘bhookkad.com‘. Unfortunately, we stopped working on it for certain reason but the love and interest for restaurants business is still there. We started off with an idea to promote ‘outdoor dining’ rather than being another food delivery business. The prime motto behind this action was the investment owner makes in building that restaurant, handling it and delivering the best they can. A year ago, many startups entered into food delivery business and few of them have already closed and few are on their way to do the same.

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But today, according to me, scene is totally different. This scenario is not only related to food startups but all the startups that are present in the market. Take the example of ‘swiggy’, I totally blown away by their service quality. Recently, I used it twice in a same week just because they impressed me through their accurate delivery time and the order tracking visibility. But what about its future? When you analyze their business model in detail, somewhere in the corner it scared me as well as made me skeptical about its sustainability. Swiggy is logistics company delivering food from restaurant end to customer’s end with the mere charge of Rs. 30.

Is it really a good business model for company? It is good model but not sustainable. Think about top line and bottom line- top line is going to grow at very rapid pace but bottom line will grow at the same rate or will be the same. It’s just because the cost they are incurring and the amount of cash they are burning on promotions. It’s not the case only with swiggy but all the startups are doing the same.

My take on this is, until and unless you have your own product you can’t earn money or improve your bottom line. Look at Amazon, look at Flipkart or look at Hola Chef what is the common thing in all of them is their own products.

Happy Observations!

What if we remove advertisements?

As always this is something I observe nowadays in every single business – Advertising is the new source of revenue.  To simplify, let’s divide businesses in different categories such as Retail, Online Media, Startups, TV Channels, Movies, Sports leagues, Blogs, Apps etc.

We will start with startups. Take Zomato, What is the revenue model of Zomato? Don’t be surprised, Zomato does free listing on their website or app. You must be thinking then how would they earn money? There it come ‘advertisement’. Zomato charges restaurants for listing them on their home page. Now, as they have started home delivery and table booking facility, they have started charging thousands to restaurant owners. Let’s move to another category ‘online media’, this includes all the social media sites, online news channels, YouTube, video sites etc. They all have one thing in common and i.e. advertisements. All of these platforms are earning just by putting ads on their platform and charging per second or per view to the advertisers. I recently did a certification course with Google partners where I learnt about Google Adwords . Google adwords is biggest revenue source of google from where they make different users to create ads which can be seen on google search pages, google sites, google partnered web sites, youtube etc. Facebook is also working on the same line where they charge you for every single advertisement and gives insights, reach and sales in return.

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Take Television industry, it is very complex to explain how it actually works but in nutshell, there are 4 main components, producer who produces show, channel who shows that show, cable or d2h provider delivers that channel to your home and last but not least is ‘us’ who watch these shows on TV. This whole industry works on advertisements. Producers pay for the time of the show to channel owners. Channel owners charge different advertisers or agencies to display their ads on in between breaks of TV series. Nowadays, d2h or cable service provider has started their own channels where they do local advertisements or display company’s sponsored shows on those channels. Movie industry is also doing the same since ‘Dreamgirl’ where Coke used in film advertising for the first time in Indian cinema. From then it has started and nowadays every movie has brand associations with movies. This has continued with recently boosted web series, you will find every single web series is associated with one or the other brand. This whole entertainment industry has boosted the overall spending on advertisements, promotions, brand building etc. recently.

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Move to the retail space now. You visit a small mom n pop shop or any super market, do you find new product launching boards? Special location for new product? Shelf decorations or promotion posters? Everything of that sort comes under advertisements or promotions where a company who is advertising its products pays to the retailer for shelf space or poster location etc. This continues with festivals as well. If you have read my earlier blog about ‘Ganpati Festival & Marketing platform’ you would understand the scale of it. Nowadays, these all sports premium leagues are all advertisement platforms only though they promote it under sports encouragement.

There are so many things where you will find advertisement is the only income source. What if we remove advertisements from the daily life? Will all the above mentioned business work? Start finding answer; it will be interesting for sure.

 

Happy Observations!

Films – we just sell what we want to sell!

In MBA, we have been taught that Marketing means identifying the need or desire or want of people and offer a product or service which fulfils people’s requirement and results in ‘Profit’ to the company. Though it is not the specific definition but generally every single product/service revolves around this definition. Consider a soap category, if a company wants to produce and distribute soaps then they first need to identify the need of the consumer, what type of soap do they need? What color will be most impactful? What ingredients need to be there? How much a consumer can pay for the soap? Etc. When we take HUL’s, P&G’s of world, we can directly connect the above mentioned example with them. To my surprise, even services are being offered as per the customer’s demand and convenience.

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But there is one segment which does not follow above mentioned process. It might follow this process for the post product marketing plan or for communication strategy but not before the product has been made. This segment is known as “Film Industry”. I have been an admirer of this field for various reasons but the most important reason being the ‘out of the box’ marketing definition they offer to the world. Take any cinema in any language; it always starts with the ‘writer’. A writer of the story jot down what all he feels and makes it in presentable format. The next process is narrating this story to the producer of the film who will give money, production support and all other required things. After listening to the story, producer decides upon the director and in succession actors, music, director of photography and all other related members. The story is then gets converted into the film which releases in the theatres/multiplexes etc.

Now, as we can see, the need of consumer is not being considered anywhere in the product making process. Films fall under ‘entertainment’ category where different people chose different ways of being entertained. A Film is generally looked as a product which gets short span to be accessed by customers at specific place. The interesting thing about film is, it is not after the market research. It is made first and then promoted in certain manner to attract the target customer group. Unlike all other product/services where the risk of getting success or facing failure could be known but film is such kind of product where you don’t know whether it is satisfying the customer’s want/desire/need in entertainment category.

But nowadays picture is changing. Few people are trying to show what they actually want to show and few people show what people want to see. If we see Salman Khan’s movie which does not hold any significant story line as compared to that of others but it still get success just because movie makers have started using ‘item songs’/’fight scene’/’six pack-ab show’ etc. But on other side movies such as ‘Masaan’ or “Nil batey sannata’ are showing what the movie makers want people to see and enjoy.

In any case, marketing starts after the product (film) is ready. Unlike others, marketing starts when product wants a worldwide release and not when it is being made. It is really interesting to see the new approaches people are using to promote their films or stories. Recently, Hollywood films have started casting Bollywood famous personalities just to attract more people towards the Hollywood films and keep the box office collection moving.

In my opinion, Marketing in film is difficult than that of any other product’s/service’s marketing. Period.

Happy Observations!

Red Apple vs. Green Apple

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Consider India, we Indians generally eat red apples. The reason behind not eating green apples is that it is not available at all the places in the market. Though red apple and green apple differs in colour but there are some added advantages in green apple in terms of vitamins or fibre. Now consider a company who wants to roll out green apples in Indian market. What will they do? They will launch opposite of red apples. They will make sure benefits are reaching people through communication channels. They will make sure of keeping price point lower than that of red apples. They will sell them on the basis of added benefits. But there are some challenges such as making sure of availability at all the places where red apple is available, retain the customers, to launch red apple under the same brand or to only focus on green apples etc. After entry of green apples in the market, red apple producing companies face the challenge as their customers are slowly switching to green apples. In such situation, what a red apple producing company should do? There are various answers in marketing language but they should think it on the big level. In India, category creation takes time. In doing so few first movers get advantage but also they get surpassed by second movers. As the green apple company has already started creating category for green apples, now red apple companies can leverage that and start producing green apples to fight that one green apple company keeping red apple competition healthy as earlier. This move will definitely cannibalize the business of red apple but it will gain through green apple business. Human psychology works in very unique way. People try to compare on the same parameters and if they don’t find then they compare on category basis. Now consider two companies rolling out green apple in the market, people will compare them with each other rather than comparing it with the red apples. This all will help growing the overall category of apples in both the variants.

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Whatever mentioned above is the metaphor. We all can relate it with the Indian FMCG market today. Patanjali is being green apple and all other FMCG companies are red apple companies. Patanjali provides ayurvedic products whereas other FMCG firms provide non-ayurvedic products. This is not the first time India is buying green apples. This has happened before when Dabur started its operation in 1903. But after few decades it became more of red apple company rather than focusing on green apples. The current scenario of India FMCG is all the firms are preparing for the competition created by Patanjali. As mentioned in above examples, I think Patanjali is recreating ‘ayurvedic’ space in Indian market. Now other companies have to decide whether to stick to the non-ayurvedic category and get affected by Patanjali because at the end of the day when customer compares a non-ayurvedic product with that of ayurvedic product, he/she will definitely go with ayurvedic product for its added advantages or to launch products in non ayurvedic category to leverage the already created category and compete with Patanjali with same offerings. Overall, from my point of view, this re-entry of green apple in the market will only boost the apple segment in all.

Happy Observations!

OTC products – the newly found love

Before going into topic, I just want to share something which directly relates me to this topic. My father is a pharmacist and has 5 branches of medical shops in Maharashtra at different places.

My father stated his first medical store in 1991, 2 years before my birth. In last 25 years, he has opened 5 branches under the name “Sadalage Medicals” over different places. This information is just to let you all know about my connection with the medical store. I have spent my last 23 years watching our medical stores to evolve in offering service to customers. I don’t know the actual reason behind I having an immense respect for pharma business. That may be I grew up with it or because it saves life or may be because I personally experienced its good effect on me.

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As title suggests, here, I am going to talk about the “over the counter” products. Over the counter products, generally known as OTC, are the products are sold without prescription from doctor and are available at medical shops, placed at customer facing counter and side racks. I have seen this category growing at very fast rate. Till 2010, I was in continuous touch with this category. After 2010 I lost touch with it. But whenever I used to visit my native, I used to find new things in this segment. After 2014, I started observing this category very closely. 10 years ago when anybody used to go to buy medicine in medical shop could find lot of medicines and less of OTC products but today when I visit any of the medical shop I find 60% shop is filled with all these OTC products.

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This transformation led me to little analysis of the category. It was best learning experience I have ever had. Let’s look at few of them here-

  1. Margin Game – The average margin per medicine ranges from 2% to 12% depends upon the brand and category. But OTC products’ margin start with 10% minimum and that’s the main reason behind all medical shop started keeping more of OTC products.
  2. Surrogate Marketing – This change is mainly carried out by drug companies. There are many restrictions on advertising drugs, consumption limit etc. To tackle this and build a brand name in drug companies have started their OTC product range. It is kind of surrogate marketing they do for their medicines. For e.g. Himalaya promotes face wash under its name with main motto to increase awareness about their name and relate it to medicine part.
  3. Impulse buy – When a patient or customer visits medical store to buy medicine prescribed by doctor, he/she end up buying OTC products which he/she thinks will be required in future. This behaviour of impulse buying has helped companies to invest in this sector and pharmacist to keep it more to gain business or sales.
  4. Perks/ Promotions offered – Pharmacists nowadays are applying for the license of ‘medical store and general store’. The main reason behind this is the trade promotions offered by companies in OTC products is way better than that of medicines. This has helped to increase the total shelf size for OTC products.
  5. Product life cycle – When you consider a drug, it is a very long process to invent it, patent it, sell it under brand until patent expires etc. But nowadays drug requirement is changing and different diseases are being found which is leading towards mismatch between instant requirements of specific combination of drugs. Lot of companies have stopped patenting their medicine as requirement is changing very frequently. But on other hand OTC product has large life and innovations are taking place at low rate as compared to that of medicines.

Considering all of the factors, I think in coming 5 years you will find medical store to be filled with 70% with OTC products and 30% with medicines.

Happy Observations!

 

Ganesh Festivals- Marketing Platform for everyone!

As we all know Indians are famous in world for its festival culture. Considering English calendar, festivals starts from very first week of January in India. Ganpati festival comes in second half of the year and known as starting point of chain of festivals in next 4 months of period. As I mostly write about Marketing in my blogs, today, I am going to express my own point of view along with some substantiate data to support my view.

Lokmanya Tilak started off Ganapti festival for a reason that is being together and show the English ruling party that if we come together we can do anything. I do not think Tilak had ever thought of Ganapti festival becoming the marketing platform for everyone. Here my point is not of Why Tilak started Ganapati Festival? Or Why Ganpati festival is not the same which is used to be in past? My point is about the marketing platform generated at such kind of festivals in India. Tell me any festival in India and I will tell you the marketing platform related to that specific festival. The idea of writing on this subject comes after watching digital flexes of local vendors on stage made for Ganpati Idol. If you look into 10 years down the line where I was only of 12 years of age, Ganpati festivals used to be in very selective parts of a town or city or any large area. From its incubation, Ganapati resides in everyone’s home for few days varying from 1.5 days to 6 days. And as Lokmanya started, Ganpati also sits on stage created by group of people in no specific numbers. This thing has took long way where I can see two ganpati sitting in front of each other by two opposite sides of the road. As the number of ganpati increased in India, the platform for marketing anything has experienced strong growth in terms of investment, reach, sales resulted in profits.

Since my childhood I have been attending the group ganpati festival actively. If I am not wrong about my memory I can say that from 2006 onwards the boost in advertising at ganpati festival has seen only positive growth. Considering Maharashtra where ganpati festival is very popular festival, on last 3 days of ganpati festival maximum number of people are on roads compared to the other time in year and if comes along with weekend you can guess the crowd on road. From marketing point of view, any show, any TV commercial or anything that has been shown on TV gets lesser traffic as compared to other time of year. So outdoor advertisement is best option one could go with in this period of 10 days to maximize their reach. If you observe, local shops are keen to do publicity in this period by posters, digital flexes, and billboards etc. Big players are also entering into this kind of publicity. Cellular network providers were the first one to enter into 10 days outdoor marketing which continues for a month dependent on the current scenario at that particular time. At present, big retail brands along with online service providers also trying their luck in this period. The research data prominently shows that cellular network providers have gained the early movers advantage in this kind of marketing.

If this continues to grow in future, I can probably say that new groups will be formed only to promote someone’s product for chunk of money which is far less than someone will pay for any TV commercial. Leaving the future on Bappa.

Enjoy the festival. Ganpati Bappa Moraya. May God Ganpati give you happiness, peace and prosperity.