Organized Retail’s Callousness in India

Organized sector retail in India is having only 5 to 6% share of the total retail market size. This certainly does not mean that out of every 100 retailers (mostly in multi-brand grocery category), 5 or 6 are super markets or multi-brand outlets in a mall. Organized retail outlets are even lesser in number – perhaps only one out of every 100 small unorganized retail stores spread over in various localities of urban, semi-urban and rural areas of India. But this big size solitary retail outlet in your city or town is a part of the retail-chain that belongs to a corporate retail business and accomplishing at least 5% of the total business volume, while the remaining 99 small unorganized retail stores – all together are able to get the remaining 95% share of the market. This means each such small retailer on an average gets less than 1% of the market share.

About Reliance Fresh:

Once, I rang up to one of the Reliance Fresh outlets in Bhopal to inquire about the prices of certain commodities. Nobody picked up their fix-line phone (a local one). After some time I tried again but in vain. No one attended to the ringing phone that led me draw a conclusion that in ‘Reliance Fresh’, it is no one’s responsibility to pick up a ringing phone – a characteristic of a big brand in organized retail.

Abut Hypercity:

I have been told Hypercity is a multi-brand grocery retail outlet of Shoppers’ Stop. Before that, by looking at this name I thought it was a real estate builder’s name or project. Anyway, they have opened their outlet about a year and a half back in Bhopal (in 2010) at Dainik Bhaskar’s ‘DB Mall’. On the inaugural day, I happened to visit Hypercity by chance. Many items on day-one were without any price tag. I was told it was because of inaugural day and would take some time to settle down. However, even if one visits Hypercity now, some of the items can still be found without any price tag. Further, another customer-unfriendly practice that is common there, is two different prices for the same item of the same package or size. For e.g., if you pick up an item for price P from the shelf (such as unbranded items without M.R.P.), it may show another price of P+x at the payment counter’s computer. If one does not notice the bill invoice (as many customers tend to avoid because of “status complex”), one will end up paying more than the displayed price tag at the shelf. This also happens with the items displayed for ‘discount’. Customers pick up the items for ‘discount’ offers on M.R.P., but when they get the bill, the M.R.P. price is charged. So as a customer at checkout counter, if one fails to notice this discrepancy, s/he will end up paying the M.R.P. and losing the discount offer. When I recently pointed out this practice to the customer care counter of the outlet, a senior staff was ignorant about such thing. I gave him an example to verify. After verifying, he found my complaint as true. Then I pointed him out that this was a regular practice at Hypercity. He tried to assure me that this would not happen in future.

Hypercity has an All-India toll-free number (1800-xxx). Sometime back, I wanted to inquire about the availability of certain item and its price at their Bhopal outlet. Based on my positive experience with organized retail outlets in a developed country, I dialled Hypercity’s toll-free number. After recorded messages, I chose the English language option. When a human voice took over, I put my query to her. She was not aware of what items were available at their Bhopal outlet and the prices. So, I requested her to provide me a local phone number of Bhopal store. I was startled to receive this reply which I quote here: “We are not authorized to give prices and telephone number of any branch”. To get doubly sure, I again called up their toll-free number and this time chose the Hindi language option. I put the same queries to their call centre operator who surprised me for the second time with his same reply: “We are not allowed to give prices and telephone number of any branch”. One wonders what they are allowed to do at customer care except to waste customers’ time and irritate them.

Now consider the organized retail market in a developed country – New Zealand where I lived in for a long time. Although New Zealand is a very small country in terms of size and its tiny population, yet organized retail market is much more developed than in India. The prominent retail chains like Pak n Save, New World, The Warehouse, Farmers, etc. are operating there for decades. The Farmers are the multi-category, multi-brand, non-grocery very successful large-format retail chain. They have even completed its centenary year (100 years) in 2010. It was beyond my imagination to assimilate what could be the population of New Zealand in 1910 when it was only 4.2 million in 2010 – equivalent to a B-class city of India. When a retail company can sustain and survive for 100 years in such a tiny population, what a retail business can do with a colossal population in India. I was told by a local resident that ‘Farmers’ were catering to the needs of country’s farmers in the initial years (1910 onwards). Hence the name ‘Farmers’ originated. With the changing times and needs of the buyers, ‘Farmers’ retail changed its policy and now became a large-format supermarket chain of multi-brand, multi-product categories starting from cosmetics; readymade dresses; designer clothing; fashion accessories; bathroom, bedroom and drawing room furnishings; kitchen appliances to consumer durables. However, when I started analyzing, I realized ‘population’ (or number of buyers in a country) was not the only driving factor to survive and sustain a business. A leading Indian retail chain called ‘Subhiksha’ had to shut down in 2009 – within 12 years of beginning. Changing with Time (like ‘Farmers’ of New Zealand), really caring for each and every customer – even prospect, talking to buyers to understand their needs and wants, helping them locate an item they are looking for in the supermarket, behaving nicely and friendly with everyone at the checkout counter putting self-ego on shelf are some of the key driving factors that help survive a business for a century. India’s organized retail businesses of any kind and their so-called customer care call-centres lack almost all the above factors. On many occasions, the staffs behave rudely and ignore the customers. Only capital investment in retail business with a so-called big brand name cannot help survive and sustain a B-2-C business nor any amount of advertising. An investment on selecting, training and paying handsomely to human resources is equally important. The retail outlets in New Zealand have automated phone numbers for customers with choice of extension numbers. If you don’t know the extension number, your line will automatically be directed after a few seconds to the ‘receptionist’ to help you out. India is the second most populated third world country where there is no dearth of customers; rather it has an enormous number of them. However, in general, most customers belong to an ‘unaware’ category – no matter even if they are educated ones and irrespective of their financial status. That explains why the government has to run a social ad campaign in Hindi called “Jago Grahak Jago” (Be Aware Customers). Most Indian customers are only aware of their pseudo-financial-status embedded in their minds. They find it below dignity to look at the ‘quantity’ of commodity printed on the wrapper and what ‘price’ they are paying. The same customer that goes to a mall or visits a big organized-sector retail outlet, proudly takes out his credit or debit card and pays the bill happily. But when s/he goes to a neighbourhood small Kirana shop, s/he maintains a credit account to buy now and pay next month because Kirana shops (grocery stores) do not usually have swipe machines to accept a credit/debit card. However, a miniscule number of dissatisfied or outraged customers – ignored or misbehaved by an egotist floor staff of a branded retail outlet, can lead to havoc in terms of bottom-line results.

A month back, I visited a small retail grocery (Kirana) shop in the city for the first time. I found that certain items were not only cheaper than other retailers but also of better quality. The shop-owner’s behaviour was not bad but normal as compared to a typical negligent behaviour of an organized retails’ staffs.  Before leaving the shop, I did not forget to take shop’s phone number and the owner’s name. During the last one month, I dialled up that shop’s phone number twice to enquire about prices of certain items. Each time the shop owner himself picked up the fix-line phone and readily provided me the prices of the required items. However, my recent experiences of two organized retailers viz., Hypercity, and Reliance Fresh were bad enough when I compared them with the small retail (Kirana) shop. 

Indeed small grocery retailers of unorganized sector cannot compete on product range and prices to some extent with the big fishes of organized retail, but the former do have certain edge over the latter such as personal attention for, communicating with and recognizing each and every buyer, replying satisfactorily to customers’ phone calls, free home-delivery to their vicinity, credit facility for reliable customers, friendly behaviour with everyone, ability to respond quickly for their buyers’ needs, low rental cost for premises and maintenance and so forth. By acquiring such strategies, small grocery retailers can not only survive in the market but also raise their percentage of market share to some extent against the big fishes of organized retail. I have found certain small grocery retailers have even managed to offer 2 to 3% discount on many grocery items they sell. One of the biggest advantages they have is their neighbourhood proximity where buyers can approach and reach anytime in a day as against organized retail store’s location in a mall or business complex at a distant place where people visit once or twice in a week only.

~Gunjan Gupta, Esq.

Brand Maintenance vis-à-vis Brand Building {Part-II}

·        Brand Building or Brand Maintenance?

·       Can experienced Brand Managers save a new product or make it survive in the market?

Tata’s washing powder endorsed by Hema Malini in 1997, could not survive. Similarly, Tata’s Raindrop shampoo with the USP of coconut oil, failed in the market despite Tata’s quality assurance. Further, according to a recent research report published in The Business Standard, India (17 July, 2010), 1500 new brands were launched in the last 1½ years (2009-10) in Indian market in the categories of FMCG, durables, lifestyle, automobiles, electronics & telecommunication, etc. Out of these, only 5 percent survived. In spite of being managed by the so-called experienced and specialist brand managers allocated for each brand, why 95% product launches failed to sustain? The secret lies in the following questions:

1)     How does a brand manager make consumers to prefer his brand?

2)     Does the best product win in the market using massive advertising?

Neither the best product nor the massive advertising succeeds in the market. An innovative marketing idea with sharp and focused Positioning is the key element that helps establish a product or service in the market as is propounded by famous American marketing strategists Al Ries and Jack Trout. Without devising a well-thought and effective positioning strategy, any amount of advertising communication does not work to build a brand. Besides, by focusing on unsatisfied customers and resolving their problems a company can increase the number of satisfied customers. “Plug the leaks by exceeding customer satisfaction and customer delight, moving to higher level customer astonishment” is the co-creation mantra given by Philip Kotler during his visit to India in 2006, but who cares. There is an exceeding consumer populace in India. Hence it has been observed and experienced that marketers’ including customer care departments’ mentality is — they can afford to ignore and disappoint up to 25% customers as they believe it hardly makes a difference to the business turnover. This is evident from an increasing number consumer grievances — both for services and products. Not only the after-sales-services are in the hands of callous, careless and egotistic staff  but also the sales management department has similar pre-sales attitude. The remaining 75% or more customers will not ever come to know about them. Or, even if some percentage learns about the disappointed customers through word-of-mouth, they won’t bother to learn a ‘lesson’ and forget negative feedback by virtue of advertising bombardment. Many Indian marketers and sales managers think what they do is  ‘practical’ while Philip Kotler's teachings are merely classroom theories. Besides, many marketing and brand managers are not aware who are Ries and Trout despite holding MBA (Marketing) degrees. These managers are merely involved in brand maintenance instead of brand building by depending on excessive mass advertising which ultimately results in high failure rate of new product launches. It hardly makes any difference whether the so-called brand manager is specialized in FMCG, White goods, or Services.

Distribution is 5+ times more capable than Advertising to establish a product as Brand.

A recent quantitative research study (2009) titled “The Long-term Effect of Marketing Strategy on Brand Sales” was conducted jointly by 3 marketing researchers viz., Berk Ataman of Netherlands, Harald van Heerde of New Zealand, and Carl Mela of the USA. By analyzing 5 years of data across 25 categories and 70 brands these researchers compared brands’ performances with their marketing mix strategies. They revealed that brand sales has significant collective effect of Product (60%) and Distribution (32%) in long run compared to Advertising (only 6%) and price promotions (only 2%). Consequently this study helps us conclude that distribution is the key to brand building and certainly not advertising. Just look at the world’s No. 1 brand Coca-Cola. It was not among the top brands when it was launched 125 years ago. Its first year sale was only $50 which was slowly built up with credibility using Public Relations – another eye-opening fact about Coca Cola. Even when Coke does not advertise on TV, the product is available and sold at every nook and cranny of the world – due to its well established distribution network penetration in the remote areas of India and the world. Macintosh, iPad, iPod (by Apple) and Playstation (by SONY) are some of the brands which became big using P.R. The public relations favours new brands by developing credibility. On the other hand, advertising favours brand extensions (that is possible by using old brand names) as it lacks credibility (Ries & Ries). Are brand managers in India ready to open their eyes and come out of their illusion about advertising? Instead of implementing the right tactics to build a new brand, if the brand managers use the tactics suitable for the established brands for maintenance, the new launch has a high probability to fail in the market. The reality is more than 80% of new launches fail in Indian market. Who is gaining out of all this? The ad agencies and the media vehicle (TV channels), while the marketing companies are losing.

·        Does celebrity endorsement help establish a product/service?

·        What makes products and services get established or survived in the market?

In developed countries (USA and Europe), there is a paradigm shift towards the Social Media Marketing – especially for new products and services with limited or scanty ad budget. The SM Marketing is not one-way like traditional mass advertising but is interactive. If a celebrity endorses something on TV in developed world, the consumers get averted as they consider that product’s imperfections are veiled by such advertising and hence the company is paying high to the celebrity. But the Indian market is not so mature. It is still thriving on traditional and irrational TV ads with an increased number of celebrity endorsements from film actors and cricketers. The endorsements by genuine customers are very limited. The celebrities charge heavily to endorse products (based on their egotistic star value), thus increasing the cost of each product or service enormously by overly raising the marketing budget. Such advertising lacks ‘credibility’ – a vital component in brand building, while endorsements by real consumers help build credibility. A unique case of brand endorsement is worth quoting here. He is Richard Branson of Virgin Atlantic Airways and Virgin Group. Being a well-known celebrity, he promotes his own brand that helps build credibility. Among Indian brands, perhaps the only exception is the spice king MDH Masala’s MD – who has adopted the same policy and appears himself in TV ads to endorse his own brand. However, in India a low percentage of awareness and education level possibly makes celebrity-endorsed ads as convincing to some extent – especially the FMCG and low-involvement categories such as food items, cosmetics and fashion products (like watches, jewelleries, etc.). The brand managers and advertisers consider celebrity-endorsed ads as the only way to help fight ad clutter and make them ‘noticeable’ for viewers in order to manage brands successful. In most cases, advertising fails to differentiate a brand from its rival in the same category. However, mere presence of a celebrity does not ensure credibility, differentiation and emergence from ad clutter. Surprisingly, some brand managers are so worried and uncertain about factors like credibility and ad clutter that they go on opting for multiple celebrity endorsements. In 2011, the recent examples are Lux (Aishwarya + Katrina), Airtel mobile services (Saif Ali and Kareena together), Geetanjali jewels (Kareena + Bipasha), Lays chips (Saif Ali and M.S. Dhoni together), and so on. Once the TV ads are stopped, do the buyers and consumers forget about the product or service? Perhaps not. ‘Amul’ is a classical example that selectively uses advertising creatively without any celebrity endorsement. It has a distinct ad strategy. Accordingly Amul butter mostly uses outdoor billboards at some selective prime locations of a city. Every week, they release a prominent current affair based story which usually involves a celebrity’s cartoon character (from cinema, sports or politics). The story is so creatively embedded with Amul butter that it helps audience recollect last week’s incident in his mind and associate it with Amul. The brand name Amul is so strong that it does not need to create ad noise on TV. In fact it rarely advertises on TV or even print. But whenever someone thinks or wants ‘butter’, the brand Amul is released effortlessly from his/her memory. Amul does have its brand extensions such as milk, flavoured milk, milk powder (for kids), condensed milk, cheese, ice-cream and chocolate. Milk, of course comes under essential commodity. However, its other brand extensions have usual competition and do not stand as market leaders due to dilution of equity for its offspring. Besides, its brand extension Amul Chocolate had a short product life-cycle and could survive barely for a few years despite competent quality, taste, attractive packaging in addition to TV advertising and keeping a price tag lower than the market leader Cadbury.

Tata’s laundry powder was endorsed by Hema Malini in 1997 with the brand attribute of ‘safe on hands’. But it could not survive in this product category although it was not priced premium. We can observe many such products/services that get established as brands without a celebrity endorsement. These days we find an advertising war going on among men’s undergarment category (vest) wherein every brand has hired a Bollywood film actor such as Hrithik Roshan, Shah Rukh Khan, Akshay Kumar, Saif Ali Khan, Rajpal Yadav, Sunny Deol and Johny Lever, etc. If one stresses his mind, can he recall who is associated with which brand? Perhaps hardly anyone will be able to give all correct answers. Moreover, at the point-of-purchase, barely anyone will recall any of these Bollywood celebrities to influence his decision of choosing or deciding an undergarment brand. However, he has to pay the high price of celebrity-endorsed advertising from his pocket. Does that mean a brand cannot survive without the oxygen of constant advertising? Perhaps true. Just after the birth, if a normal infant is kept on oxygen for a year or two, s/he would probably not survive after the oxygen is removed because s/he has not learned how to breathe in fresh air without the oxygen mask.

Who can strategically manage a brand?

Under such scenario, the role of a product-specific brand manager for a category-specific product range is questionable. An experienced Marketing Strategist with wide exposures to various marketing functions (such as advertising, marketing research, branding, sales promotion, etc.) rather than a product-specific brand manager could be a better choice for a brand manager’s position – specially for product “launches” for the reason that the correct Brand Positioning has to be done at the launching phase. Besides, as the bestseller “The Fall of Advertising and The Rise of PR” (by Al Ries & Laura Ries) has shown with examples how advertising is a waste of capital resource without any prediction of return, while Public Relations really builds brands slowly and gradually without a heavy and wasteful expenditure.

“Today's major brands are born with publicity, not advertising. A closer look at the history of the most successful modern brands shows this to be true. In fact, an astonishing number of brands, including Palm, Starbucks, the Body Shop, Wal-Mart, Red Bull and Zara have been built with virtually no advertising.” (Quoted from: ‘The Fall of Advertising and the Rise of PR’).

Critical Praise for The Fall of Advertising and the Rise of PR

 “Al and Laura Ries offer powerful arguments as to why companies need to use more PR in the launch stage of products and save their advertising dollars to do maintenance work in the later stages. Whether or not you agree, you will find their arguments and illustrations stimulating and deserving of serious discussion in your company.”                                                                                   — PHILIP KOTLER

Branding is an “evolutionary process of communication” that can be achieved through Public Relations – provided a correct brand strategy is devised at the first place. Trying to revolutionize it through too much advertising (as is usually done in the launching phase) does not work in reality as we have seen in the above examples of a durable (Cease Fire) and FMCG (laundry powders, Pond’s and Captain Cook) products (see Part–I). There are many more examples too. Advertising can only work after a product has been established as a brand. Moreover, launching a new brand extension of an established brand through mass advertising rarely succeeds – except diluting the equity of the main brand. The brand extension exercise either engulfs the parent brand or its offspring (the extended version). Dettol lotion is an example where the original parent version is endangered whereas its extension Dettol soap is surviving. On the other hand, Pond’s toothpaste (extension of Pond’s cream) is one such example where the offspring (toothpaste) failed to survive. In Marketing, such phenomena are called as “Cannibalization” wherein a brand extension eats up its parent brand or vice versa. But in market, more and more new products are launched as the brand extensions of an old established brand. For instance, ‘Dove’ bath soap has been extended to shampoo category, ‘Boroplus’ antiseptic cream has its extension as Boroplus prickly heat powder, the original medically used antiseptic topical lotion ‘Dettol’ brand has been extended to Dettol toilet soap cake and hand-wash liquid, and so forth. The original Dettol lotion is almost forgotten while Dettol antiseptic cream has become extinct and replaced by Dettol shaving cream. The latter is, however, not a leading brand in shaving cream category. The rival of Dettol called ‘Savlon’ lotion copied its tactic to introduce its extension as Savlon soap. There are countless brands in Indian market imitating to adopt similar strategies without applying a creative thought process. The Brand Managers think that extending an established brand to some other category is not only easier but also involving lesser expenditure on launching and advertising because the parent brand is a well known one. This policy is so risky that it could result in any one of these viz., 1) make the original brand almost powerless or endangered and the extension more powerful as is observed in case of Dettol lotion versus Dettol soap; 2) make the brand extension weak as seen in case of Dove shampoo (compared to leading brands of Unilever’s ‘Clinic’ and P&G’s ‘Head & Shoulders’); 3) can extinct the brand extension (e.g., Pond’s toothpaste) or even the original brand (e.g., Dettol antiseptic cream, etc.).

How certain brands succeeded and established in the market?

It is quite appreciable to witness the rightly devised brand strategy by Paras Pharmaceuticals for its OTC products. Their successful brand “ItchGuard” is not ‘extended’ to other categories to make ‘MoovGuard’ and ‘KrackGuard’ or ‘HeelGuard’. There is no similarity among “ItchGuard”, “Moov” and “Krack” as far as brand names and their functions are concerned. The different brands are for different purposes – even though they are all creams for topical application (on the skin).

Neither the best product nor the best advertising wins in the market. It is the best strategy that conquers. Since advertising is an art form, the best advertising may win an award – according to the bestselling authors and world-renowned marketing strategists Al Ries and Laura Ries (USA). But it may not win the buyers and market share unless the brand has already been established through creative P.R. (ref: The Fall of Advtg and the Rise of PR). Harry Potter (book series), Yahoo, Google, Microsoft, etc. used word-of-mouth publicity to become successful brands with hardly any advertising. Take for example a new and unknown company launches a cosmetic product range in the market using mass advertising, it will end up spending a fortune, before early adaptors will try a product or two. If they like it and find something different worth mentioning, they will spread a word in their circle. The same word-of-mouth publicity could be achieved using creative public relations without wasting millions. Shahnaz Husain Herbal Care products have been established using word-of-mouth publicity. Way back in 1970s, she did not launch them with a big advertising bang. It was a small scale enterprise that began from her home. She had no funds to afford any advertising. Yet she succeeded by creating a different category of products along with specialized clinical services and positioned the same as “care and cure” – a classical example of successful creative public relations with the right marketing strategy. PR works on the principle of slow and steady wins the race. But if she goes for mass advertising now, even people who have never used Shanaz Husain brand, will also recognize her and will have certain impact to buy her powerful brand range. This is not possible with the new and unknown company. Spending millions on mass advertising does not ensure the brand’s success. Traditionally thinking Brand Managers do the same mistake in haste to capture the market – as we have seen in the above examples of “Cease Fire”, laundry powder and other brands. Even the new Bollywood movies’ TV promos with high ad spend do not ensure film’s success. The success is attained through word-of-mouth if the viewers like the movie. The Social Media Marketing (SMM) works on the same principle of word-of-mouth publicity. Every product or service cannot be benefitted by SMM unless they have a right Marketing Strategy with proper SMM tools. SMM is neither a fad nor a magic wand.

~Gunjan Gupta, Esq.

Why Jobseekers are Discriminated in India?

What are the remarkable DIFFERENCES between the job markets of a third world country like India and developed countries like New Zealand (and Australia)?

1)      Labour laws are strictly adhered to in New Zealand, but barely in India.

2)     In New Zealand, employer companies as well as employees believe in “Work-Life Balance” which means no one is forced to work beyond the fixed hours on per day and per week basis (35-40 hours per week) as a full-time employee. It is considered as unethical if your employer does not give you enough time for your family life and/or yourself. It is believed that if an employee is forced to work for indefinite hours (as is usual practice in Indian private and corporate sectors), it is a sign of imbalance in employee’s life that prevents him from giving optimal output at work place. Quite strange for Indians in India who are routinely compelled to work every week for 48 to 72 hours or beyond, without any extra monetary or tangible/intangible benefit.

3)     After applying for a job in NZ, if a jobseeker calls up the prospective employer (usually after a week or two of applying), it is considered as jobseeker’s expression of interest and enthusiasm towards the vacant position that shows his initiative. It also distinguishes that candidate from the pack of other applicants. Conversely, if you take similar initiative in India, the prospective employer/management or recruitment agency will consider that you are a desperate jobseeker with strange behaviour. Knowing this allows them to ignore you, exploit you in salary bargain (if called for an interview) or even mistreat you with arrogance if you ring them up.

4)     Indians think and presume there is no discrimination in India whereas Indian students undergo racial assaults and are discriminated in Australia. But in fact, there is more discrimination in India than in Australia or New Zealand. Many won’t be able to digest this, but the fact is – in India the candidates are selected and jobs are offered on the basis of marital status, date of birth, age, gender, caste, surname, relatives, region, religion, favouritism/nepotism, current salary and what not. Senior citizens have witnessed that this kind of ‘approach’ was not prevailing in post-independence era for at least two decades until 1970’s. In New Zealand, no job site or an employer asks a jobseeker (prospective employee) to provide any such information (gender is optional and is for information purpose only) – no matter even if you are a migrant. These things are mandatorily asked in India. WHY? Because by looking at your date of birth or salary (CTC), an employer can reject or shortlist you – irrespective of your ability to do or perform a job efficiently or inefficiently. For example, if the male boss of a company is looking for a personal secretary, he prefers to choose only the females in the age group of 18 to 25 (most preferred age group) who are unmarried. Indian laws allow or facilitate to choose an employee on the basis of marital status, age, and gender – as we have seen in this example. Similarly, an experienced person in the age of 35 or above is often rejected from the bunch of CVs by the recruitment agencies because of ‘mature age’ unless he is a top notch professional who has been headhunted. If a candidate is out of job for a considerable time due to any valid reason, or has work experience of a Gulf country and returns to India, s/he will face tremendous problems in re-employment in India. The prospective employers try to exploit such candidates by offering a lower position or a considerably low salary in a situation when there is no dearth of jobs in job market in the liberalized and reformed Indian economy. The recruiting agencies or prospective employers invariably ask for the current salary (CTC) which remains zero in such situation. In New Zealand, asking your current salary (CTC) is considered as discourteous. Many NZ employers – including multinationals and big corporate like ‘Fonterra’ have their online application formats where there is no question about applicant’s current salary. Instead, there are expected salary range options to choose from. It does not matter if a candidate has no job at the time of application. It won’t be an excuse to exploit a jobseeker when it comes to deciding salary. But in India, employers and recruitment agencies have right to discriminate on the basis of factors such as age, gender, marital status, current salary, and many such factors.

Discriminating Jobsite

Recently, I have come across a job portal launched by a noted HR agency, ABC Consultants. They have created a milestone to innovatively discriminate applicants by restricting most jobseekers on the basis of their current salary. So, if your current salary (CTC) is less than Rs. 10 lakhs (1 million) per annum, you cannot register on this portal and upload your details. Instead of functioning as a job portal for senior managers with over 10 or 15 years of experience level, HeadHonchos tries to discriminate on the basis of salary. Consider a senior manager who has just completed an executive MBA or attained a similar qualification from an IIM or XLRI and seeking a higher salary (Rs. 10 lakhs or more) on a better position in a suitable company. But if his present or last salary was, for instance, below 10 lakhs, he is disqualified to register on the basis of his salary although with an upgraded education, he deserves Rs. 10 lakhs or higher salary. HeadHunchos could therefore be the right portal for many such jobseekers. If Steve Jobs (ex-CEO, Apple) intends to apply to a company (operating in India) through HeadHunchos, he will definitely be disqualified because his salary (according to media reports) was only Rs. 49 ($1) – much less than Rs. 10 lacs. Isn’t it bizarre to witness such condition in modern India that shows an open form of discrimination? Isn’t it an arrogant stance in place of an intelligent business move? Inspired by such ideas, tomorrow the job sites may start restricting jobseekers’ registration on the basis of gender, religion or material status such as owners of luxury cars (Mercedes, BMW, Rolls Royce) and villas and so forth. In New Zealand, this is unlawful because that is a developed country having a developed mindset and society. But in India, the meaning of development is perhaps limited only to “infrastructural” and share market developments or riding an expensive car!! Isn’t it SHAMEFUL for India and Indians to allow and accept such things??!! Isn’t it astonishing to find that millions of jobseekers (who are all educated ones) do not even realize that such acts or concepts are the forms of discrimination? If you do not fill up your date of birth or gender while filling up the resume information on any Indian job site (including the leading sites), it will neither upload your profile nor register you. Isn’t it time to have a deep thought on such discriminatory issues that Indians in India are carrying on for so many decades without applying their minds?

With the technological innovation and developments in India, the thinking and attitude of the people and society at large are shrinking instead of growing and expanding. On the name of ‘market segmentation’, the Indian businesses are trying to fragment the society or market on the basis of “approaches, nexus and nepotism”. Consequently the principle of “Equal Opportunity Employer” (practised in the USA and other developed world) is unheard in India in spite of its claim of the largest democracy in the world. Before blaming other countries and suffering from a superiority complex or syndrome, Indians should have a self-check. One wonders why Indian labour/job market is not considered as equivalent to that in New Zealand or other developed world. The answer lies somewhere in the discriminatory practices in Indian labour market.

~Gunjan Gupta, Esq.

Brand Maintenance vis-à-vis Brand Building {Part-I}

If you are a Marketing Director and/or CEO of a consumer goods company, do you think a Brand Manager with experience in White goods (for instance) or any other branded product/ service management will fail to manage FMCG products and vice versa? Is that Brand Manager totally unsuitable for this type of job openings? Is a Brand Manager solely responsible for brand’s management and survival, or the marketing strategy and tactics are more responsible for a brand’s life-cycle?

While going through an opening for Brand Manager on web, I have noticed such requirements that led me to start thinking about the rational and irrational aspects of Brand Management.

What is a ‘Brand’ after all?

“A brand is a name that stands for something positive in the prospect’s mind”. For instance, the famous cars like BMW stands for ‘driving’ while Volvo stands for ‘safety’. Further, Google stands for ‘search’ (on Internet) and Twitter stands for ‘tweets’.           

– Al Ries & Laura Ries      

·  Is Advertising Synonymous with Selling and/or Brand Building?

·        Does Advertising sometimes generate Repulsion?

In India, it is usually thought that heavy mass media advertising is essential to Brand Building, Managing and achieving sales targets. That’s the reason why we find too much cacophony of noise on Indian TV channels for every damn item. Besides there are local businesses operating in the cities and towns. Many of these individual businesses advertise on local TV channels – imitating the national brands without any strategy. By doing so, these local businesses manage to get some responses from local customers. Furthermore, just recall the TV ads by local jewellery showrooms which are either operating in a single city or at the most in 3-4 cities. But these jewellers advertise on national TV channels – a clear example of waste of funds capriciously with no planning.  But merely by advertising on TV or print media – either locally or nationally does not turn a product or service into a brand unless it is backed up by a strong marketing strategy and value creation. Further, there is no surety that enormous spending on mass advertising (as every company and every brand manager’s notion) will establish a product as a distinct brand or extend its life-cycle. Just by advertising traditionally on TV channels, can a company turn its product/service into a brand? Not really. For every 100 products/services advertised on TV channels and/or print media, how many become successful brands? Or, just by copying a media strategy and trend of the established brands (advertising on TV and/or print media), could new products/services become successful like them? Not possible. In the recent history (past 20 years) of liberalized Indian market, I recall “Cease Fire” which spent massively on TV advertising with 60-second or longer TV ad campaigns that were not only captivating but also played on fear psychology – somewhat like life insurance products.  Yet its ad spending became liability due to failure of ‘Cease Fire’ in the market. Another such example in 2000 was a laundry powder (from a company in Rajasthan) that advertised at least 3-4 times in every commercial break on each TV channel throughout the day for several months. But nobody (including me) is able to recollect even its brand name today, in spite of its excessive cacophony of noise and the most advertised product at that time. Perhaps it advertised excessively to wipe out established brands like Surf and Ariel. But this laundry powder has soon become extinct from retailers’ shelves. In the year 2000, I just wondered how that company would survive if its laundry powder failed in the market. As is evident, it might have gone bankrupt.

Dirty Commercialization: Today the TV audiences are forced to witness the dirty ads – especially of consumables. For example, detailed demonstration of various brands of sanitary napkins bombarded in every commercial break. Similarly, more and more male body sprays which are shown as irresistibly compelling for young women to shed their clothing and grab the man who has just used the body spray. Indian TV advertising has crossed the borders of decency to become ugly and repulsive for any civilized society – irrespective of Eastern or Western culture.

Is extending an established Brand a winning strategy?

Cosmetic giant Pond’s extended its brand to Pond’s toothpaste thinking that it would survive in Indian market. But the extension (toothpaste) miserably failed. Today hardly anyone knows that Pond’s ever had any toothpaste. Similarly, an Indian company DCW of Gujarat launched ‘Captain Cook’ salt that was very much successful. Captain Cook salt even outperformed Tata salt in many regions. Then DCW went on to launch its brand extension ‘Captain Cook’ flour (Aata) in mid-1990’s with vast advertising. Despite its better quality compared to its existing rivals and the then existing trend of unpackaged open flour available through neighbourhood flour mills, the extension ‘Captain Cook’ flour had a short product life-cycle. DCW’s pricing strategy to keep it under the premium category was also responsible for its failure. This shows that advertising neither ensures to insert a brand’s name into consumers’ minds nor compels them to buy the product. In some cases, it succeeds but in many cases, it fails. Besides, advertising cannot even make a customer ‘loyal’ to a particular brand. Loyalty comes when a service factor gets associated with the product or retail outlet (as explained in the next section) to differentiate it. There are many TV ads that capture viewers’ attention and are interesting to watch but when it comes to brand recall at the point of purchase, a buyer’s brain fails to recall its name and sometimes even its product category – due to factors such as too much ad noise, ad clutter, limitation of consumers’ memory, unimpressive or boring ad, copycat product, wrong choice of product name, non availability of advertised product on super market’s shelf or nearby grocery (kirana) shop, and so forth.

Does advertising create Brand Loyalty or is this a myth?

If advertising bombardment stops on TV, people won’t stop buying products or consuming services. The advertisers may argue that advertising helps generate ‘brand loyalty’. This is again a myth which can be easily understood by the following examples. Every Indian consumes several cups of tea daily. Does s/he demand for a particular brand? Not even once in a week or once in a month. Further, if you consume brand Y of tea at home and your kitchen stock has exhausted, won’t you buy brand Z if brand Y is not available at your nearby grocery shop? Certainly. You won’t stop drinking tea just because brand Y is not available or you have seen a TV ad bombardment of brand X of tea. So, to get brand X at any retail shop of your city, will you go on searching several shops to show your brand loyalty? Certainly not. The same principle applies to other consumables like soap, laundry powder, talcum powder, etc. Furthermore, in our daily life, we routinely buy and consume many unbranded and unadvertised products such as sugar, pulses (lentils), eggs, vegetables, etc. In Business-to-Customer marketing, the brand loyalty is very low. It is, however, higher in B-2-B marketing. The customers are not even loyal to organized-sector branded retail outlets — leave aside the brands. The loyalty fluctuates with factors like ‘facility’, ‘attraction’ or ‘convenience’. For instance, when a brand throws a sales promotion offer like ‘buy-2 get-1 free’, the buyers are likely to shift their choice from their routine brand to that offer (an attraction). Similarly, when someone like ‘Big Bazar’ retail offers a discount sale (an attraction), a temporary loyalty can be seen among the buyers. But why customers are loyal to a nearby grocery store over a branded retail outlet or super market? There lies two basic reasons:

1) the grocery store (Kirana shop) offers monthly-credit ‘facility’ which branded super-markets do not (the latter offer only credit card facility!),

2) its location lies close to the residential area, so it not only saves buyers’ buying time but also offers ‘free home delivery’ services to  regular customers (dual ‘conveniences’).

When I went to live in New Zealand, the brands available at super markets or superettes (nearby dairy stores), were not only unfamiliar to me but I was also exposed to so many product categories which were neither found nor usually available in Indian market in 2008, such as mayonnaise, salad dressing, goat milk, peanut butter, brown rice, brown sugar, various grades of branded flours, ham soup, rice bran oil, olive oil, a variety of clean & canned fishes, different types of cheese, toilet paper, etc. There was no TV advertising like we see in India for each and every product. Despite this difficulty, I was able to choose the food products which were closer to my taste and convenience and friendly to my pocket – although initially I required several visits to various super markets and grocery shops to familiarize with the brand names. Besides, if I was not satisfied with the pack size, taste or price of a product, I had at least one or more choice or option to switch over. Thus it could be inferred that the main driver to losing brand loyalty was consumer’s unhappiness or dissatisfaction. The latter cannot be generated by bombarding with any amount of advertising or ad claims (such as recommended by every 3 out of 4 doctors or used/preferred by 10 million customers). During his India visit in 2006, marketing Guru Philip Kotler supported this in his seminar lessons: “While the aim of business is to create satisfied customers, the truth is companies continue to lose unsatisfied customers”.

The bottom-line is advertising has a nominal effect on the low-involvement products (FMCG, consumables, etc.). Many such products are bought whimsically, called ‘impulse buying’. It is usually the high-involvement, high-value products where advertising (TV or print media) plays some role to help in the decision-making process. These are mostly various categories of durables such as automobiles, white goods, kitchen appliances, cell phones, laptops, or certain kinds of services such as mobile telephony, dish (direct to home) TV, insurances, banks, investment products, etc. The right sort of creative advertising is required that can clearly distinguish a brand from its rivals and position it strategically. However, in spite of peak level advertising in print and TV during October-2011 the festive month of Dashera and Diwali, when the media too accelerate people’s buying decisions by news, articles and special TV programs, the average sale of consumer automobiles (a very important sector of high-involvement category) fell down to 36% (source: CNBC-Awaaz). What does this demonstrate about efficacy of mass advertising? During his India visit in 2006, Philip Kotler also noticed the flaws in the marketing style of Indian managers and commented on advertising:

·        “It has become a one-P discipline. Selling (Peddling)”.

·  “Marketing professionals lack accountability and hence take short term decisions”.

·      “Instead of reducing marketing to advertising and selling, it makes sense to stick to research”.

It is quite surprising that even after more than 5 years of Kotler’s serious comments – which meant that marketing is restricted to advertising only – whether it induces selling or not, is secondary; Indian marketers have not changed or are not ready to change their mentality. 

~Gunjan Gupta, Esq.


Continued in Part-II