Allen Solly, Color Lab, Market Segmentation, Customization and Powershift

This season, Allen Solly ready to wear brand of apparels has unleashed a kind of color revolution. Take a look at its advertising campaign, ‘Catch a color and we’ll match it’. A print ad released in news daily shows a young man donning oversized shades on his nose, in twenty something is shown to be confidently crossing a road with his head turned to his right (looking at the traffic or onlookers) against the background of a Victorian structure. The picture of the model in the ad shows him in a  close up shot from tip to toe with a accentuated focus on what he is wearing- mosaic of colors- red jacket, sky blue shirt, peacock blue pocket handkerchief, mustard trouser, light brown socks, and blue shoes.  Allen Solly has launched ‘the color app’ which can be used to ‘create your signature colour’ which the company will dye for customer. It certainly is a step forward for a brand which brought the concept of ‘Friday dressing’.

Ready to wear apparels came in fixed sizes and limited range of colours.               This new strategy introduces a paradigmatic shift in the way ready to wear apparels are produced and sold. As a marketing strategy readymade brands gave customers value by way of providing something ready to wear (instant gratification) but it came with a severe limitation of limited color choice (production constraint).  This strategy involved reconciling two opposing forces that reside in any business- production seeks efficiency by reducing variety (larger production cycles of limited range) but marketing seeks effectiveness  by offering what customers want (customer differences push for choice).  Hence a business organization is typically pulled two directions- the internal forces create pressures in favor of mass production of one thing but external reality (market) seek production as per individual customer’s needs/wants.

It is for this reasons the strategy of market segmentation is called a compromise between efficiency and effectiveness.  Customer would be best served when he or she is provided with a product or service crafted or created according to his or her unique needs. That is each customer becomes a segment of ‘one’. The other extreme is when one product is offered to all customers irrespective of differences in them. This is exemplified by the classic statement that Henry Ford made “Any customer can have a car painted any colour he wants so long as it is black.” Getting close to customer requirements is inevitable in competitive markets. The best insulation against competition is to serve customers better than competition by getting closer to his or her requirements. 

Industrialization which gave birth of large corporations dismantled the one to one marketing that prevailed in old era characterized by craft (furniture, buggy, shoe, jewelry). Consider tailors of the past who provided custom fit service or shoe makers who designed shoe as per feet size.  This direct relationship was broken apart with the arrival of industrial mass production.  But it arrived with a compromise; product and production instead of customer began to assume central position in the business universe.  As competition began to intensify, business tried to juggle opposing goals by adopting a strategy called ‘mass customization’. This is an attempt by firms to deliver variety (customization as per customer needs) retaining the mass production model.  The mass customization strategy may come in different shades- made to order/ build to requirements (enabled by modular production, FMS, computerization) to giving customers an opportunity to individualize non-core aspects of a product (common in cars, houses).

Allen Solly’s strategy follows a co-creation model (also followed by Levis) by which customer is given opportunity to collaborate in production process of product by which he can create wardrobe in colors of his unique tastes and preferences.

Looked at differently it is symptomatic of a power shift- customers are now beginning to run factories without owning them.


Apology, Satisfaction, Recovery Mangement and Marketing Services

In services zero defects is difficult to achieve. Uncertainty is inherent to service creation and delivery. To a great extent customer-provider interface in the service factory is responsible for deviations to happen. Two days back I had to go without dinner because a local restaurant failed to execute my delivery order and I was left waiting into midnight. The restaurant did not bother to apologize for this failure. I have written off the service outlet in question for all times to come. Feeling of hurt comes naturally in any incident of violation. But it is also natural for violations to happen in social or business conduct. One of the most powerful strategies to recover from failures is to tender apology and say ‘sorry’. It is makes both great spiritual and business sense.

Geetika Jain in one of the Speaking Tree columns wrote an interesting piece on the importance of apology.  We express an apology by saying sorry. But a sincere apology is to be distinguished from superficial one.  A superficial apology may reflect how well groomed and polite a person is but it is not same as a true meaningful apology. Apologizing for our wrongdoings operate superficial and deeper levels. When an act of apologizing is diminished to only uttering a word ‘sorry’ without accompanying a  deeper sense of  realization,  it becomes superfluous. The pretence may help the harmed/violated but harm the pretender. A heartfelt apology is real, and it works wonders for both parties involved.

An apology, on the surface is an opportunity to get out of a difficult situation but it should not be seen in this way. A mere utterance of the word minus sincerity, repentance and atonement render it hollow and futile. ‘To err is human, to admit one’s error is super human’. Facing the victim and apologizing is an act of courage. People in harmony with their life say ‘sorry’ with an ease.  The positive and conscientious achieve peace with themselves only after making amends.

Saying ‘sorry’ does not involve monetary cost but gives back in a number of ways. The mistakes are diluted, tepid and estranged relations come back life. ‘Sorry’ can dissolve animosity, bitterness and resentment. This dissolution of rancor sets stage for resolution and achievement of harmony. ‘Sorry’ is a powerful mechanism not only to appear the victim but ourselves as well. Harming or offending someone deliberately or by mistake makes us guilty whether we admit it or not. This guilt can sit deep into our subconscious unleash misery by robbing peace and harmony.  We can become prisoners of guilt. ‘Sorry’ is therefore liberating and cathartic. Deep seated guilt can cause psychosomatic maladies. Saying sorry and admission of mistakes is sign of evolved human being.

Going down the path to admitting mistakes and apologizing is not easy. Only evolved people are able to do so. The true pristine self rushes to say ‘sorry’ but it is ego which obstructs. It is the ‘I’ rooted in age, social hierarchy, money and status that prevent us to be in our true sublime self. ‘Age and social status can also thwart this sublime act’. It is then no surprise that prayers in most religions comprise of apology for transgressions and repentance for mistakes.

Value, Branding, Cool, and War between Apple and Samsung

There is war out there. And the war is no longer cold, hush-hush; rather it is an explicit direct bloody combat. Apple’s strategy to expand its market by diluting affordability barrier through its attractive installment plans launched in collaboration with its trade partners has been met with almost identical campaign by Samsung for its Galaxy range. The body copy, message and creative execution appear remarkably similar to each other.

Galaxy and Apple are both aspirational brands. People want them but their high price restricts their market to top tier of the market. Price advantage is one of the measures of a brand’s command over its customers. Apple’s products including mobile devices have for long commanded huge price premiums. People use expressions like ‘cool’, ‘cult’ and ‘iconic’ to describe Apple products. There is something amorphous about Apple which makes its offers / products beyond comparison. The mystery and mystique of Apple brand has not been any short of what cult gurus have on their followers. Take for instance the connection between Osho and his followers. There is everything but reason why people follow Osho. The connection transcends logic and rationality. Like gurus, some brands manage to intersect with people on highly sacred and valued spaces to create reason defying bonds. At the heart of cult following is dedication stemming out of emotional commitment.  Apple has been of such brands besides Beetle, Saab, Vespa and Harley Davidson. These are magnets to their followers.

But recent advertisements of Apple iPhone are quite opposite to the idea of a cult brand. The appeal is purely rational and attempt is to reach out to a larger set of customers. It is reverse of magnetism, madness, spell and euphoria.  Apple through its new installment program has made its handsets within the reach of a larger set of audience. The new ads questions: ‘Why wait?’ along with a picture of iPhone 5 and mention of words ‘for Rs 16,990’. The body copy of the ad describes three attractive installment plans with a monthly outgo of as small as Rs 1376. 

The competition between Samsung and Apple is quite palpable and direct. In almost identical format, Samsung launched a counter campaign to promote their Galaxy range of smart phones. The headline goes as: ‘The incredibly creative Samsung Galaxy Note II own it for just Rs 99 per day. The message is that now a potential buyer can choose from Galaxy range (Galaxy Note 800, SIII, Note, Grand and Galaxy Camera) of instruments on easy and attractive EMI scheme (monthly outgo as little as Rs 1790). Apple's new-found interest in India suggests a subtle strategy shift

The two things common to both Galaxy and iPhone communication are focus on price and promotion. Price and sales promotion assume importance when brands become similar. The brand parity or commonality renders customer choice slippery. Apple for long enjoyed a status of a brand as ‘beyond compare’. Customers took pride in its ownership and the experiential ‘wow’ rendered its demand inelastic and insulated from competition. But things now appear to be different for brand Apple.  Jan 17, 2013 Forbes post was headlined as ‘perception scores show Samsung, Apple at parity’. The BrandIndex data mentioned in the post says that ‘perception of the iPhone is outpacing perception of the Galaxy; those scores have been trending closer over the past few months’. The crux of the issue here is not which of the two phones is better rather iPhone has become an object of comparison with others.

Brands derive their strength from connections that they forge with customers. There are three fundamental routes to value creation: utility, symbolism, and experience.  Functional brands thrive by delivering utility though performance of certain functions (use ability). Brands in the symbolic space are valued for self-concept enhancement and social esteem (symbolic meaning). And brands can be desired for experiential aspects or hedonic pleasure (sensory gratification).  Performance centric brands compete on logic and reason and hence fail at creating ‘mindlessness’ and ‘passionate devotion’. They continue to be trapped in comparison discourse.  But brands that that jump over cognition and forge affective links through hedonism and psychological significance escape ‘thinking scrutinizing mind’. The ‘cool’ factor stemmed from Apple’s touch, feel and psychological meaning.Samsung Get a Galaxy Note 2 at just Rs. 2,999 per month

The current campaign focused on price and EMIs appeal to reason which is antithesis of what cool brands are all about.  

Coke, Cadbury, Being good, Doing good and Branding

Marketing conjures up images of a salesperson aggressively pushing his products. It is popularly believed that marketing is all about selfishness wherein seller seeks to enrich himself at the cost of consumer. However in last couple of decades marketing practice has evolved and companies have begun to put consumer at the center of their marketing efforts. Accordingly marketing is emerging as a practice directed as satisfying customer or moving them on a higher level of existence (by solving their problems) making profits in the process as a consequence. But his shift of focus on consumer does not liberate marketing from selfishness or self-gain.

 In consumer centric paradigm, what do marketers offer? The marketers are made subservient to goals that consumers pursue or ends that they want to achieve. Consumer needs and wants present spaces on which brands are created. Branding mandate is consumer dictated. A brand cannot be anything other than want its target consumers want it to be. So what do brands offer to their consumers? Brands become agents of the delivery of material wellbeing- consumers’ material existence becomes the areas of focus. Brands position themselves as solutions to their problems emanating from their physiological or psyco-social spaces. Consider: Dove prevents damage to hair or skin; Dettol provides hygiene: Amul makes you healthy; LIC covers risk: MDH makes food tasty; Maggi saves time; Asian paint weatherproofs walls; Cherry shines and protects leather; Airtel connects with the friends; Ceat gives grip on the road; Sansodyne comforts sensitive teeth; Louis Vuitton makes you stand out; iPill gets rid of unwanted pregnancy and Fair & Lovely bestows confidence.

Within the overall imposed needs/wants structure, marketers work out branding strategy. Brands appropriate attributes (Castrol’s synthetic oil/ Vicco contains turmeric) and benefit (Bisleri’s safe to drink, Phillips bulbs saves energy). Mostly branding discourse is narrowly confined to the means and methods of making consumer’s material life better. Brands establish justification by delivering material gains or becoming devices enabling effective negotiation of material world. Rarely do brands tread the non-material or existentialist concerns. It may be due the fact that existentialist aspects do not translate into sound value propositions. May be being good and doing good make good theoretical sense but do not translate into branding opportunities.

Quite contrary to popular branding practice two brands that have taken the branding appeal to a higher existentialist level are Coke and Cadbury Dairy Milk. Both of these brands have been subtly shifting focus away from the product. Products are a physical construction and hence open to deconstruction and reconstruction. Objective differentiators are easy to outmatch. And in a reason based environment more is perceived to be better. Competition based on specifications can degenerate into collective annihilation. It creates dog eat dog situation by narrowing consumer focus on to objective product based criteria.  Therefore better brands develop escape routes by not being ‘more’ rather ‘different’.

Coke had its own share of product focused branding. It for a long period of time it used drink as the center piece of communication (secret formula/ hobble skirt bottle, tingle, taste, fizz, and refreshment). The brand also called itself ‘the real thing’ to suggest that Pepsi is not real or fake. But the question is how far these propositions can take the brand. The larger reality is that the product is nothing more than carbonated water packaged in a bottle albeit with different brand names. When the taste and sensations come close to a narrow threshold, Coke has taken the brand to compete on feeling platform but feeling here is not about activation of bodily senses  rather engagement with higher order consciousness.

Consider the brand communication. Last year the brand ran a campaign. ‘Ummeed wali dhoop sunshine wali aasha’. The core idea was to promote ‘ummeed’ and ‘aasha’ (hope, expectation) about the future. The brand tried to fight an overall sense of hopelessness about the way things are moving in different spheres of life (tomorrow is going to be better). And now ‘haan mein crazy hoon’ campaign takes the concept of happiness (‘open happiness’) from drinking (sensory pleasure- selfish) to doing things that make others happy. There is a shift from getting to giving. It urges people to discover the joy of giving, an appeal to higher order consciousness. The modern combative and overly competitive environment creates a heightened concern for self and a complete disregard for others. Sanity/ logical and mindfulness means concern for the self. But this singular quest for self-betterment/ concern for ‘I’ makes the collective existence hostile/ unlivable. The communication suggests break the rule, be crazy and do something good for others and bring smile on their faces. This kind of craziness (selflessness) is good

Cadbury Dairy Milk brand’s growth trajectory is almost similar to that of Coke’s. The brand sought to establish its legitimacy in the market by focusing on goodness of milk (brand’s logo depicts dairy goodness- milk being poured into the chocolate). This has been attribute based positioning which was necessary to get approval from mothers. Recently the brand took the communication from the literal ‘meetha’ to metaphorical ‘meetha’. It was transformation of the brand from sweet confectionery meant for kids to something that could be enjoyed by adults. The meaning of sweet was reinterpreted (meaning extension by subversion of sensory sweetness to sweet moments- remember cricket ad). The statement ‘Kuch meetha ho jaaye’ is a double layered with two meanings running parallel with each other (sweet occasion and sweet thing). Later brand changed its communication to ‘kuch meethas ho jaye’. With this the brand took upon itself to appeal higher order consciousness by urging people to  become agents of happiness – how small gestures can bring sweetness in relationships (wish your uncle Diwali who you have not spoken to for years).   

The only purpose of life is not to indulge in pleasure for the self. Humans are born with high order consciousness. It is a source of happiness for many. This gives brands an opportunity to forge deeper connections. 

Victims on road, ‘It’s not my job’, ‘Going beyond the call of duty’, and Emotional buy-in

On Saturday (Jan 5, 2013) various news papers reported the callousness with which victims of Delhi rape were treated. As they lay injured on road exposed to the chill of December, badly brutalized, mentally wrecked, police personnel squabbled on jurisdiction instead of rushing to help them.

There are hundreds of fabled instances in service marketing that demonstrate how good organizations train people to  go beyond the call of duty to satisfy customers. These include how a FedEx employee climbed a barbed wire fence risking his own life to deliver a package containing blood to a patient and a UPS manager hired an entire plane and diverted two others to make a delivery. Disney cast members are trained to anticipate customer needs and respond to them immediately. A nine year old burn patient needed a cream. Since it was not available  nearby, a call was made to the supplier company. The customer service representative made it available knowing that it involved working on a holiday and breaking the rule of not entertaining an order of less than fifty cases.

Services involve intersection between customer (citizen) and provider (police).  These points of intersections tend to be human unlike a computerized robot welding a part on an assembly line. Automated manufacturing systems rely upon SOPs to preempt deviations (quality failures).  Rules and SOPs have made a way into service systems in a big way. For instance McDonald’s service  consists of a number of activity based SOPs like order taking and assembling a burger. SOPs are developed to achieve standardization but an over reliance upon them can have a dehumanizing effect. Consider how disgusting it is to deal with frontline people like human robots such as air- stewards and call center employees. The quest for efficiency pulls organizations into standardization mode but it may not be the most desirable way of dealing with situations that involve human interactions.

Service encounters involve an interplay between customer expectations and delivery by service personnel. Therefore the first starting point for developing quality systems  (SOPs) is to fully and accurately understand customer expectations. This involves a complex exercise into knowing and delivering. But in the given case (brutalized bleeding victims on the road) does it really need rocket science to discover and deliver what is expected? It is likely to make your heart pound and the impulse to help can’t be controlled. But the squabble over jurisdiction signifies how emotions are mediated by mind- when you need to feel you think. Some emotions are universal like happiness, sorrow, surprise, anger and disgust. We are surprised at the mechanical response of police and why they did not feel anger and sadness to go beyond the call of their duty to help the victim.

Exceptional situations call for extraordinary response.  Mostly crime creates exceptional situation for the victim but  for police or doctors it may just be an ordinary situation (‘we see this every day’) which gives rise to the concept of the job (the work you have to perform). This gives rise to important questions: does the repetition of dealing with crime (victims) make people insensitive (used to)? How does a rape or murder degenerate into a statistic and hence our attitude to dealing with the victim? How do emotions get mediated by reason?

Policing is a serious business that involves lives of people. Many service organizations look for ‘emotional buy in’ in selecting people for the job involving customers beyond qualifications (indicators of IQ). That is, how emotionally satisfying a job is for a person in term of its ‘meaningfulness’.  When a person opts for a job for ‘existence’ reasons (need based, salary, power, and progression) the work becomes an ‘imposition’ from the organization. The performance in such situations is unlikely to transcend the requirement barrier to avoid penalty. On the other hand if job offers meaning beyond the ‘existence’ considerations (I want to help people in need/ contribution beyond self) the performance is likely to transcend the minimum performance standards. This explains why lowly activities like sweeping floors or cleaning shoes become highly valuable and meaningful (higher order contribution) in a Gurudwara or a temple.

In certain jobs it is very important that ‘right’ kind of people are attracted. Policing is one of them. Policing is transformational, it provides opportunity to people to ‘make a difference’ in society. This discourse on ‘higher order’ contribution and ‘meaningfulness’ is unlikely to ring bell with all therefore it is important to revisit our recruitment system and ensure that people with right kind of mental makeup join the service.

Business as coalition and compulsions of coalition

A firm is an organization for business purpose. Organization in management literature means a unit created made of parts or component by act of bringing them together. It is an act of crating something. What are the parts that typically make a business organization? The parts of an organization are structurally called departments. These include sales, finance, human resources, production, R&D, and procurement. This essentially means organization is a coalition of different groups. Consider the following:
• Mr Human joins the business and he is very clear about the fact that he joins the business for compensation and progression.
• Mr Operations has technical guy who joins the business for making sure that operations run smoothly for longer runs and nothing upsets the production process.
• Mr Finance has had grounding in capital budgeting and cost of capital. He sees success in risk and uncertainty minimization.
• Mr Research has all along been known for his ability to invent. For him the organization is a new laboratory to experiment and create breakthroughs that make headlines.
• Mr Procurement knows it is easier to buy a few things from a small base of friendly suppliers. More suppliers and more number of purchase units upset their lives.
• Mr Engineering brings their design skills and knowhow to create new products and processes but with an eye only for the technical strength.
• Mr Manufacturing wants his production lines run as smoothly as possible. Frequent changes and modifications complicate their system.
• Mr Sales is always keen to convert whatever is given to him in cash by hook or the crook.
On the whole these coalitions making an organization bring different notions of effectiveness. Consequently it is natural for business firm to experience politics of coalition. Each of the coalition partners attempt to pull the entire decision making in the direction that deems fit (see the figure) . The localized effectiveness is pursued at the cost of global effectiveness.

This political way of functioning of business organization undermines the very purpose for which it comes into existence- the business. Business means actualization of a potential exchange with the prospect i.e. the customer. And in a competitive scenario the only way to succeed is to get the customers to say ‘yes’ to what a firm condenses in a product or service. The value offered by a firm is sigma of decisions made by different coalition members. The issue then is what is the probability that target customer would say yes to what firm has done? It is very low because typically none of the coalition groups represent customers. And when the customer pronounces ‘no’ to a firm’s offering the entire system loses because the revenue stream is cut. How can a business survive without its customers responding favorably to what it does? Business survives and prospers when customers open up their wallets for a product or service. Without this a product is an unrecovered cost.
It is in this context the top management is expected to perform a harmonizing role. A coalition is compulsorily likely to have conflicts arising out individualized or localized concepts of effectiveness. Consequently the system would get pulled in different direction readying it for failure. It is akin to making safe cabins in Titanic. People must go out of their cabins and make the Titanic safe. The concept of global ‘right’ or ‘effectiveness’ must be appreciated. A business does right when its products or services win target customers. It must be understood that a firm is an organization of coalition partners for the purpose of business. And business is about actualizing exchange with potential customers which happens organization creates satisfied customer. Therefore converge of goals and roles are essential to survive in a competitive market.

Managing coalition is a challenging task. All the companies which consistently perform well manage to do so by creating goal convergence amidst confusion and chaos. This is reason why only a few managers rise up to the top.