· 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.
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