Love, joy, ecstasy, happiness, delight, satisfaction, commitment, Starbucks coffee and Macallan single malt.

On my recent visit to my brother in law’s home I discovered a live case study of how a brand can create an ordinary consumer into a brand fanatic. He had moved into a big spacious home and the family was keen to show me around. When I was being taken on a guided tour of the house, the conversations revolved around the construction material, equipment, lighting, flooring, faucets, hobs and hoods. This house had all the common accouterments of a decent metro house and I was not so keen on seeing them. The commonality is a great leveler. It is a big robber of identity and uniqueness. The windmills of marketing machine run on this unending cycle of unique-common-unique. In the commonness of things one thing that struck me was two Starbucks mugs on the top shelf of an expensive hand carved rose wood show case. These shared space with expensive crystal figures and bottles of single malts.

The curious learner of consumer behavior in me who was resting peacefully on this Sunday was suddenly kicked awake. The ambiguity that sat on the top of the shelf needed to be resolved. Why mugs made of common inexpensive porcelain sat on the highest level? Is there anything in common between single malts and coffee? Coffee is enjoyed hot, single malt  is best on the rocks. Coffee is common but single malt is uncommon. And it would be stupid to compare Macallan with Starbucks. My curious CB mind did not want to be left there. It wanted to delve deeper into the apparent incongruous reality. What was the method in this apparent madness? And upon being asking as to how much these mugs cost, he replied, Rs 750 each. It was quite a shocker to me.

And I could not resist pointing at the inaptness of Starbucks mugs that sat majestically on the shelf. To that my brother in law narrated an incident with his eyes gleaming and his smile nothing short of pure ecstatic joy. It appeared as if he had met God who blessed him with mugs to savor the drink of heaven. He narrated an incident of his visit to Austria. He told me that one very cold morning he was on his way to airport to take a flight. Half way to the airport he was alerted by the airline that the flight was late. He had checked out of the hotel and did not want to go back. Upon seeing a Starbucks sign board in one of the shops, he along with his friend thought of spending some time at Starbucks sipping hot coffee to kill time and ward off freezing cold. But as they moved near the outlet, it was unclear whether the shop was open for it was too early in the morning. Nevertheless they tried their luck and pulled the door. It was quite disappointing to them to see the coffee bar deserted except for a lady who appeared to be readying things. It did not take much time for them to realize that the shop was not yet ready for customers. But in curiosity my brother in law asked the lady if they could have coffee knowing fully well that it was an unfair and unreasonable demand and no way could they be entertained.

In response to their request the lady politely replied that the coffee bar started its business at six and serving customers before time was not possible. No business could be transacted before the bar officially opened as per rules. Reading the disappointment on their faces the lady explained she could still do something. She explained her predicament that she could not break rules but would also not like to let customers to go unhappy. Then all of a sudden she agreed to prepare two cups of coffee for them. This pleasantly surprised them and they did not want her to go out of her way to serve them. But then she insisted on the guests to have their coffee.  Before leaving the bar, the duo wanted to pay for their cherished Starbucks brew but she refused to take any money.  Upon insistence as to why she would not charge, she explained that as an employee she was entitled to some cups of coffee in a day free of cost which could be had any time of the day and she offered them two out of her share.  

Now I understand that these simple mugs were much more than simple coffee containers. They were reminders of the Starbucks experience which was etched in my BIL’s mind. It is not much difficult for a rival company to procure better mugs, brew a better coffee, create better environment but still they may not be able to deliver exceptional experience. It is difficult to capture how both animate and inanimate blended together to create a memorable experience. A brief encounter of my BIL with Starbucks has converted him into a brand fanatic who talks and talks frequently about how somebody touched his heart. A look at those Starbucks mugs with eyes other than his misses the entire reality. This differentiation here is impossible to imitate. Great brands are differentiated in hearts; they create unique highly personal memorable experiences.

This episode revealed to me how a person can get so possessed by a brand and he does things which appear incongruous but are actually not.  

In a book titled ‘The Starbucks Experience’ given to spelling out guiding principles, principle 3 goes as ‘surprise and delight’ and the chapter begins with a quote of Rabindranath Tagore:

“I slept and dreamt that life was joy.

 I awoke and saw that life was service.

I acted and behold, service was joy.” 


Customer role, Innovation and Value Creation

Things are changing.  And change is often so subtle that it shows up without any warning signs. Managers often discover its arrival when their performance metrics show deterioration. A late discovery can potentially erode customer and competitive superiority.

One of the important sides of marketing equation is market or customer. And no marketer can afford to ignore to check how developments are affecting customer. A change is both an opportunity and threat. It all depends upon how it is reacted to- whether it is seized and converted into customer value creating initiatives or it is allowed to depreciate value delivery. Consider how internet technology altered the value equation by enabling firms to deliver content (e.g. movies) directly to customers doing away with the need to buy or rent DVDs. Blockbuster lost to Netflix due to this. The web seems to be recasting the concept of market that can be targeted. The term ‘market’ now needs to be separated from the concept of location. The current campaign by eBay attempts to establish that shopping can be done sitting at home with an ease, economy, and convenience.

The customer side in a marketing exchange hides three roles. A transaction involves an act of buying, paying and using a product or service. This gives rise to three different sets of considerations. For the buyer ease (location, physical availability) of buying is important whereas payer role involves exchange of financial consideration like cash or card. The product or service is use or consumed and at this intersection point and benefits are delivered or extracted (user considerations involves what the product does and what benefits it delivers). Consider a simple case of Maggi noodles. The user often is a child (benefit-taste), the buyer may be the servant (ease or convenience) and the product is paid (price considerations) for by the parents.

In the old thinking, goods are produced by the firm to be exchanged with customer who ‘uses’ them to extract performance. This required for achieving satisfaction. Long time back Levitt proposed that people are not interested in drills rather their performance (holes). The user role can be complex which can deter people to buy drills. Recasting user role (simplifying) a drill marketer boost sales by creating do it yourself drills.  Earlier glucose monitoring systems made diabetes patients dependent upon doctors for reading blood sugar levels. New glucose monitoring machines have recast the space by transferring the user role to patients. Now they can monitor sugar level on their own, the skill required to do the job has been reduced. Washing machines intimidated many potential users for their usage required some kind of ‘expertise’ to press right buttons for right jobs. But now many marketers have launched smart models which on their own ‘read the wash requirement’ (fuzzy logic) create value by de-skilling the customer role as a user.

Apple’s current campaign (why wait?’) spells out how the brand can be bought and paid for in interest free installment plans. The company has adopted an open distribution model (not through mobile companies) and tied up with its distributors Redington and Ingram. This scheme tweaks the high upfront financial burden and places the brand within the reach of many who otherwise could not buy unlocking a hidden market potential. The new cab services launched by companies like Meru in metro like Delhi are based on altering the payer role. Now the cab service can be taken by distance travelled or time You pay for time you want to use a cab for or the distance travelled). This payment scheme allows firms to tap a new segment of customers. Earlier newspapers were expensive because they sought revenue from readers. But now newspapers make money not out of readers but from advertisers.  The ‘cash on delivery’ innovation has opened a huge internet based market in India.

There was a time when magazines could only be bought from newsstands or vendors. This subjected reader to ‘sold out’ situations and procurement inconveniences.  The shift to subscription based model by most of the magazines like India Today and Business Today creates value by changing buyer role. The inconveniences associated with buying things from markets and malls are throwing opportunities to new web based sellers like Jabong and India Times. Domino challenged the notion that warm restaurant food can only be ad in ‘dine in’ format by creating home delivery model.  Domino creates value by saving its customers from travel, parking, waiting, and weathering.



Multi-utility or sports utility vehicles: the power or powerlessenss on road?

The automobile industry has been undergoing a subtle transformation. In the June quarter of 2012 MUVs outsold sedans for the first time. Two of the recent launches by M&M and Maruti Suzuki have created excitement to a segment which always trailed behind regular sedans. M&M’s XUV 500 and Maruti Suzuki’s Ertiga have received overwhelming response from the market.

Consider some statistics. XUV sold about 9000 units which is a figure higher than combined sales of brands such as Corolla Altis, Cruze, Honda Civic, Skoda Laura, VW Jetta (6500 units). Maruti Suzuki’s Ertiga enjoys a waiting line and is grossing sales of about 6000 units.

Structurally a MUV or SUV is vehicle built on chassis of light truck which makes it bigger, sturdier, powerful (two and four wheel), and spacious capable of a comfortable on and off road drive. The unique blending of internal and external dimensions makes SUVs or MUVs irresistible to many. That is the reason why they are flying off the showrooms fast.

Around the world, especially in rich cities SUVs are a common sight driven by a single person. This stands quite opposite to the ‘reason’ built in the vehicle in terms of space and sturdiness. The city roads hardly provide space for ‘playing round’ and riding the beast beneath the bonnet. The physics of SUVs remain grossly underutilized. The congestion on roads adds to driving and parking discomfort. The unused space and gas consumption combine to make them environmentally unfriendly. Then how they make sense?

The connections probably go deeper. Consider the brand names that these vehicles sport:  Duster, Safari, Fortuner, Thar, Endeavor, Captiva, Pajero, Range Rover, Yeti, Land Cruiser, Outlander, X Trail, Discovery and Scorpio. These words have nothing to do with neatly laid smooth city roads. These roads rob the ‘Outlander’ or ‘Cruiser’ to be a ‘Rover’ of ‘Thar’ or ‘Safari’ to show the bite of ‘Scorpio’ or power of ‘Yeti’. Further take a close look at the frontal façade of these vehicles and keep staring at them. It may take a while to observe the ferocity of a prying big cat.

Urban cities are great levelers. These are democratized spaces where the unevenness of class, creed and status and power become invisible. Consider long queues of cars line up at a traffic signal or people crowding around a mall on a weekend. All become children of the god, made of same matter and chosen to thread on the same path. In such a situation a SUV become an instrument to reverse the identity robbing effect of urban existence. Baudrillard observed that in its concrete function the objects solve a practical problem but in its inessential aspects they solve a social or psychological conflict. The The  subliminated meaning of a SUV make is an object of male fantasy. By the very construction a SUV is a heavy projectile capable of fast movement. Travel is a necessity but speed is a thrill, excitement and enjoyment. In its structural muscled up oversize construction SUV cannot escape the phallic symbolism as a male thing. It is a play thing, a sporting device. A SUV is an easy filler of the gap left by the subjugated city life. SUV is an extension of home with all its protective walls and grills designed to protect from the aggression of the outside world.

HUL, Sustainability, Dry Shampoo and Consumer Values

Given the threat to the planet earth many companies have begun to incorporate sustainability in their vision and mission agenda. Consumers, though in small number now have begun to evaluate their consumption factoring in their effect on environment. On the other hand, many companies have begun to embed sustainability in their business strategy. Environmentally sustainable practices are no longer moral or legal ‘impositions’ rather these make good business sense.
HUL in one such company which has committed itself to sustainability and it seeks to achieve this goal by innovations. The company has undertaken many initiatives at the back end (supply chain and manufacturing) to curtail its environmental footprint. Its eco efficiency programmes are aimed to reduced energy consumption, wastage, and other resources like water. On the front end, the company is focused on developing innovative products to meet its sustainability goals.
Surf Excel Quick Wash reduces the water consumption reducing the need for rinsing clothes less number of times (usually people rinse four times that needs four buckets). Now clothes can be cleaned with only two rinses without compromising the quality of wash. Dry shampoo is another innovative idea in this direction. One approach to saving water is to urge consumers to use less water while shampooing their hair but dry shampoo completely does away with the need to use water. The product comes as a spray which absorbs oils from hair and lends volume.
An innovative product, notwithstanding its merits and technical superiority must ‘make sense’ to customers. A product is an idea codified in a physical form. The acceptability of an idea depends upon how it ‘fits’ in a larger scheme of things where it seeks to find a place. New products often create cognitive and behavioral disruptions which manifest in resistance to adoption. For instance when pressure cooking (pressure cookers) were introduced, for many consumers the idea was unacceptable. It militated against the long held belief the slow cooking produces best taste. Almost similar resistance was faced when cooking gas was introduced. Though gas offered huge advantage over stoves and coal ‘angithi’/ stove but people associated coal cooking to be the best. Even now many people are wary of microwave cooking because ‘waves’ are perceived to be harmful and ‘food cooked is not as tasty’.

HUL is also likely to face similar challenge. Shampoo is used to wash hair and washing and cleaning are intrinsically linked to water. So the idea may clash with long held value system. Theoretically dry shampoo is disruptive in nature- it disrupts the way shampoo category is thought about and also the way shampoo is used. These double disruptions are likely to obstruct acceptance of idea and later call for behavior modification. It is here marketing strategy has a role to play. It must attend to the challenge of reconciling the two discrepant ideas. The transition from double edged blades to twin was much smoother for Gillette but is slightly difficult in case of shaving creams to foam. It took long for microwave brands to make people open to the idea of wave cooking.
The battle for HUL is set in the minds of people. The oxymoronic perception requires reconciliation for this product in order to win consumer acceptance.

Consumption, reference groups and celebrity endorsement

Last week a news item reported that many firms have dropped celebrities from their brand communication campaigns. These include Pepsi Mountain Dew ( Salman Khan), Big Bazaar’s FBB (MS Dhoni and Asin), Fastrack (Genelia D’ Souza), Thums Up ( Akshay Kumar), Netrogena ( Deepika), and Taj Mahal tea ( Chirangda Singh). Yet there are brand which continue to use celebrities in their brand building like Aamir Khan (Hero series Samusng), SRK (Dulux), Aishwarya Rai ( L’oreal), Anushka Sharma ( canon), Nikon ( Priyanka Chopra), Amrish Puri ( JK cements) and Saif Ali Khan ( Royale).
The modern man belongs to the subspecies Homo sapiens. The individual is closely tied to the collective. Accordingly a person belongs (member) to groups such as family, friends or aspire to belong or identify (non member) with like cricketers or film stars. These groups become important for the marketers because of the influence they exert in consumer by shaping their beliefs, attitudes, values and behaviors. It is this influence which makes them hot property for the marketers.
Groups derive their importance from the functions that these perform for consumers: informational, utilitarian and self expressive. In some buying situations deficient consumer knowledge and expertise necessitates search for information from others (a doctor is a good advisor for specialized toothpaste (Sensodyne) or infant products (J&J). In certain cases consumer seek or enjoy group membership by conforming to the approved norms to avoid punishment or disapproval (Leather jacket for HOG membership or certain brand e.g. Ecco shoes for golf playing). People want to express their identities as to who they are and who they are like. People aspire to be like some groups/ individuals which help them enhance their self concept. It is psychological association which makes many consumers to like a brand ( Reid and Taylor- Amitabh Bachchan or Katrina Kaif- Lux).
The basis of reference group influence is the power (as against authority) or capacity to exert control over consumption. The power types include: referent power (based on identification based on admiration- we admire Sachin’s achievements or beauty of Kareena Kapoor); information and expert power (one wonders what Amrish Puri has got to do with JK cement; he is neither knowledgeable nor expert of construction/ Dr Devi Shetty is certainly a good endorser for a heart valve and Hafeez Contractor can certainly influence behavior for a housing or office complex); the human desire for appreciation (reward) and avoid threat or risk leads to certain groups acquiring reward power (‘hey you’re looking gorgeous’- Ponds or a women becoming ravishingly ‘attractive’ in Parachute Body Lotion). Consumer buying is also driven by the motivation to conform to group norms in order to avoid something negative for instance stopping at traffic signal (fines) or wearing formals to a club dinner (admission denied).  
Reference group’s capacity to influence consumer behavior is determined by credibility or trustworthiness because of knowledge and expertise (What is Amitabh Bachchan doing in Nano Clean surface cleaner? Or Sachin Tendulkar in JP Cement?). Attractiveness or identification is another consideration. George Clooney or Pierce Brosnan influences Omega’s target audience based on attraction and identification so is the case with Shah Rukh Khan for Santro. Slice seduces its target customers by calling its drink as ‘aam sutra’ borrowing from the attractiveness of Katrina Kaif.
Brands borrow influence from reference groups to move consumer. Once successful does not mean always successful. The dynamism in the marketing environment at both ends sometimes can upset the brand and endorser fit. This necessitates course correction which can take many forms including discontinuance of endorsement. Remember how Accenture dropped Tiger Wood scandal rocked match mixing involving skipper Azaruddin who endorsed Tissot brand. May be the youth brands like Mountain Dew and Thums Up do not find their endorsers not young enough or match psychographic profile. The long relationship between Nakshtara and Aishwarya Rai broke after her marriage and the brand signed Katrina Kaif as endorser.