Posts by Pragya Singh - New DelhiPage 2 of 2

India’s Peter England employs value retailing

copy-of-peter-england-shirtsPeter England, a leading mid-priced menswear retailer in India, is re-strategizing and starting a “value retail format” that will offer only lower-priced labels (these were formerly sold by another business operated by Peter England’s parent company). “Value retailing is a concept based on offering quality brands with huge savings for consumers,” explains India’s Economic Times.

Consumers here have been trading down when it comes to apparel: In our recent survey of 500 Indian adults from Delhi, Mumbai and Bangalore, a third of respondents said they would consider buying less branded clothing, and a third also said they would consider trading down or stop purchasing their regular brand of clothes.

Rather than cheapening the Peter England brand by slashing prices, the company is smartly trying to keep its brand image intact while simultaneously appealing to customers who are trading down. J. Crew in the United States and Crazy Line in Israel offer similar case studies.

New AnxietyIndex research: Focus on India

Walk the streets of Mumbai, Delhi or Bangalore and you’re likely to find the usual—markets bustling with activity, kids wandering noisily, youngsters hanging out and families carrying out their daily chores. But probe any adult on how he feels about events in his world, and he’s likely to get tense. The first wave of AnxietyIndex India is out (download the presentation here), and it shows that Indians are worried. Not about military tensions around the world, the war in Afghanistan or even the state of the economy. But about crime, escalating food prices and unemployment. Worry clearly stems from issues that are here-and-now, that impact people’s day-to-day lives, that affect them directly but over which they have no control.

However, when it comes to talking about the future, Indians are upbeat. Aside from crime and terrorism, they believe most things will improve in the next six months. This makes sense given that India is sitting on some strong fundamentals: healthy economic growth in the recent past; lower impact of the global slowdown, resulting in reasonable-to-good growth forecasts; key sectors performing well, from FMCG to coal and cement; growing rural demand; and political stability.

There’s an interesting learning here for marketers–brands need to ride this wave of optimism, sparking confidence, showing the road to prosperity or promising a better lifestyle. One brand that has done this is Nokia: Its campaigns have successfully positioned the brand as a means to economic and social progress. Consider the TV spot below which highlights the economic aspirations of the brand’s target audience.

No anxiety here: Indian elections bring hope and optimism

manmohan-sonia-rahul

The core team: Dr. Manmohan Singh, prime minister, with Sonia Gandhi and Rahul Gandhi

Results of the general elections in India have been announced, and Congress beat its toughest competitor, BJP, by a mile. The nation welcomed the results with open arms. Hope and optimism abound: India is looking forward to a government that brings with it political stability, no sudden swings in decision-making (this time the ruling party isn’t at the mercy of its sometimes unruly allies), and the possibility of continuing on the growth path while (hopefully) shielding the nation from the full impact of the global recession. The stock market has responded with a big thump: The BSE (Bombay Stock Exchange) Sensex rose more than 2,111 points to around 14,000 on Monday morning. Even if temporarily, consumers have all but forgotten the sounds of slowdown. It’s out-and-out buoyancy!

Love sans compromise, courtesy Airtel

airetelYou can cut back on products or services, but the slowdown shouldn’t make you cut back on love. That’s the message Airtel, India’s No. 1 telecom service provider, wants to drive home in its latest campaign.

The goal was to build awareness for its newest initiative, “My Airtel, My Offer,” which allows people to customize mobile plans based on their usage patterns. But the way it decided to communicate this was by playing on the current sentiment of cautious spending.

The campaign sees the return of screen couple Madhavan and Vidya Balan (both famous Indian actors), with the former repeatedly sending romantic text messages to his wife. She retorts that in these times, one should use money judiciously. To which he says, “There should be no cutbacks in love.”

Relationships, especially family, occupy center stage for Indians. Airtel recognizes this fact and plays off it to optimum effect.

Recession-themed spot switches gears in India

One of the first television commercials here to take inspiration from the slowdown belongs to a category one would least expect: not real estate, not banking or insurance, not airlines or travel but switchgears.

Indian electrical-products manufacturer Havells humorously reminds consumers that its electrical switches (technically, multi circuit boards) are shock-proof by showing situations that are not shocking these days—canceled salary increases and dwindling property prices. And it notes that while the recession has caused many shocks, consumers can at least avoid electrical shocks with Havells.

The tone is neither heavy-duty nor mushy—the spot simply attempts to make light of the economic situation for viewers who’d prefer brands not to add to the gloom that newspapers and TV news have already created. It also fulfills the same need that cinema and music do for the bulk of Indians, providing entertainment and a refreshing break from reality.

Staying out of the price wars, Part 2

surf-excel-packIn my recent post “Staying out of the price wars,” I wrote about brands that are highlighting unique features in their products to beat value players that compete on price. Another approach is distraction: focusing customers on your brand’s strengths, distracting them from making direct price comparisons with cheaper competition. There are three simple (but powerful) strengths you can leverage:

Source Credibility: Emphasize the quality of your product/service—e.g., highlight the raw material used, the source of key ingredients or the processes involved. The way Everest, an Indian brand of spices and condiments, advertises its saffron product is a case in point.

Brand Integrity: Draw attention to the values your brand champions. Surf Excel, a popular detergent brand, pledges its commitment to child development and education by giving scholarships to poor students in India.

Brand Heritage: Bring to the fore your legacy, the number of people you have touched, the kinds of relationships you have cemented over the years. Kellogg’s in Europe and the U.S. regularly underscores its long heritage to help counter the effects of store brands.

Distraction Strategy will not only help you keep your customers, it will also greatly strengthen your brand’s equity.

Staying out of the price wars

sundrop-heartMany brands have suffered at the hands of competitors that eat into market share and profits alike using just one big weapon: unthinkably low prices. Years of marketing efforts turn out to be in vain once brands get converted into commodities.

Today, even hitherto unaffected categories are being threatened. So what’s a brand to do? It’s usually not possible (or advisable) to match the price points of these competitors.

Instead, Sundrop, a cooking oil brand, talks about Oryzanol, a compound found in its oil that helps reduce cholesterol and keep the family’s heart health in check. Similarly, ICI Dulux promotes the water-resistant qualities of its Weathershield Max exterior paint.

By finding and highlighting unique features in their products, both brands shift the consumer’s focus away from a direct price comparison, shielding their products from the jaws of cheaper rivals.

Cheap, mouth-watering and recession-proof

indian-food

Visit a bakery, street food vendor or branded street food parlor in any Indian city and you’ll see an industry that is still buzzing. One reason for the brisk business is, of course, the price, which is substantially lower than at restaurants. But they promise so much more than just cost savings: variety by the heaps, as well as highly indulgent and drool-worthy dishes. You never get the feeling that because it’s less expensive, you’re having a stripped-down version of a dish.

Eating at these places promises entertainment, indulgence and an escape from mundane reality, all rolled into one—a deeply satisfying experience. What can brands learn from this? It’s nice to make your product affordable, but consumers really appreciate a bundle of good experiences in these trying times.


All roads lead to … smaller cities

town-view-india

Distinguished Indian strategist CK Prahalad’s words, “It’s important to break the tyranny of dominant logic and bring back a dash of creativity” have never been more relevant.

One application of this idea is to challenge the assumption that the whole nation will uniformly experience slowdown. Marketers primarily look at big cities because they are easy consumer centers. But in current times, smaller towns and cities need to be evaluated more seriously, as the effects of economic crises haven’t really trickled down to them.

For example:

Jones Lang LaSalle has identified 30 Tier-3 cities—where 41 percent of India’s wealth resides—as hubs of real estate activity.

• Hospitality group Global Hyatt Corp has planned a $200 million foray into midsize hotels in Mysore, Lucknow and Indore over the next four years.

• The NASSCOM (National Association of Software and Services Companies) president has pointed out 43 tier-2 and tier-3 cities as primary growth centers for IT/BPO sector both immediately and in the long term. BPO industry vouches for their lower operational cost, good talent and regional language expertise.

In short, to bring the optimism back to your business, it pays to remember that small is the new big.

What will the winds of recession bring for India’s youth?

Most downturn conversations are about the impact on corporate coffers and the common man—the family caretaker. Little is being said about its implications for youth. Will the slowdown affect the 565 million Indians under age 25?

indiayouthIndian youth have only just begun the journey to consumerism, so they won’t feel the pinch as harshly as their Western counterparts. And they’ve never had an “excessive splurge” mentality—they’ve learned to live smartly within their means. They save by shopping on local fashion streets, commuting with (cheaper) monthly bus passes rather than spending on daily tickets, talking heartily with prepaid mobile cards. Their smart consumerism is what will come to the fore during tough times.