Wednesday, May 30, 2007

Branding: Likely impacts of convergence

……Cont’d from last post

The Space Elevator is not a reality yet. Neither is the Jet Pack, the cultured meat or the food pill. None of this, however hurts as much as the lack of a Teleporter. For this little kid growing up in the slow paced, sedate New Delhi of the pre-liberalization days, Star Trek was a religion, Spock was almost a God(or at least what I wanted to be when I grew up) and the ‘Beam me up Scotty machine’ was the most practical and useful technology ever invented. The Teleporter was the fodder for a thousand daydreams, most often dreamt over unending, soul deadening school periods. To tell you the truth I still miss it on occasions.

Spock: This is what I wanted to be when I grew up. None of the pinching of the ears helped much though

In fact, as it turns out, most of the inventions that were promised by the science fiction authors of yesteryears have not come to pass. Yet, some of the stuff that has happened is nothing short of magical. Concepts like genetic engineering, the virtual world, nanotechnology etc. would all have been unthinkable for someone back in the ‘30’s or 40’s. One such development which has got me all excited these days is the much anticipated development of technological convergence or the coming together of data, telephony, Television and wireless services in a single network. Simply put, convergence will allow all these services to be delivered as data packets over a single network and instead of buying these services separately we will be buying them as a package from giant media/telecommunications/cable companies.

How would this affect the question of Branding discussed in the last post? While none of us has a crystal ball, its still a lot of fun to speculate about and try to imagine what might happen. I strongly believe that technological convergence will make it much easier for Marketers to stress different aspects of their brand to different audiences. If it is at all possible, then we might even see a world in which the same brand stands for different things for different groups of people. Such an event becomes a possibility because convergence will allow marketers to customize their product offerings/messages almost on an individual to individual basis.

Consider the following ads.

Both of them are Indian ads for the soft-drink major Pepsi. In terms of content, they are exactly the same. However, one of them has been made for North Indian audiences using Bollywood stars while the other ad has been made for South Indian audiences and uses stars from the Tamil film industry. Till today such efforts at customization of ads for different audiences whether based on location, or age or other demographic factors has been carried out at a very aggregate level. This means that many North Indian families living in the South would have had to watch an ad that they perhaps did not identify with. However, I believe that the coming of technological convergence will allow marketers to carry out such customization on a much more fine-grained level.

Traditionally, agencies like AC Nielsen in the US as well as MODE or IMRB in India used to monitor the TV viewing habits of a number of different carefully-chosen households. This information was then used to design TV shows for the next season. In contrast, the coming of web servers has allowed marketers to observe the online behavior of millions of consumers and to produce customized content/products as well as deliver customized ads to them. Once convergence happens, we will find that marketers or specific companies will actually be able to track not only consumer’s online behavior but also their TV and telephone habits. Marketers would probably be able to track what people’s favorite music is, what sort of movies they like or what their favorite color is. On top of this, by analyzing this raw information, they will also be making certain conclusions about things like what particular consumers suppressed desires are, what attributes they might want in a shoe or even who they might vote for in the next elections. How good or bad these conclusions are depends entirely upon the sophistication of the analysis methods used. Like any other science, I am sure the accuracy of such analyses will improve with time.

As this accuracy improves, marketers will be better able to customize specific content and ads and even particular product offerings towards particular segments. Given the fact that everything is transmitted over a single network as data packets, customization will be possible on an individual to individual basis. This means that in the same apartment building, a North Indian family might see the North Indian ad for Pepsi while their neighbors see the South Indian version of it, the older couple might be seeing more ads related to medicines while the younger ones might see more ads with sports stars in them.

Not only will such customization be possible on an individual to individual basis but because of convergence it might be possible to carry out such customization in a very consistent manner across all media. Since the same network supports Cable, Telephony and Internet marketers can make sure that individuals always see the same ads across the various mediums thus ruling out any chances of dissonance in their idea of the brand. The price conscious customer might always see ads for a brand which stress its affordability while the style conscious consumer will always see ads which stress the style factor of the product.

Customization: Because different people want different things

Thus, we might end up in a world where the same brand has different identities for different segments of consumers. Of course, as I discussed in my last post it is highly arguable if such a thing is at all possible. Man being a social animal, social interaction and a process of back and forth feedback forms a big part of his forming an idea about a particular brand. This creates the scope for a lot of dissonance if everyone else has a completely different idea about the brand. However, whether or not a particular brand can have multiple brand identities is not important for this discussion, what is important is that the coming of convergence will provide marketers the ammunition to be able to try such stuff. At the very least they should be able to subtly emphasize different attributes for different consumers.

That in itself, is an exciting development. I have no doubt that a lot of marketing practices that we now follow will become obsolete or evolve rapidly in the coming decades. It looks like a really good time to have graduated from a B-school. Now if only the Teleporter thing worked out as well………..these airline prices are driving me crazy.

Friday, May 18, 2007

Brands: Is it possible to have multiple brand identities for the same brand?

One idea that has consistently fascinated me is the possibility of Multiple Brand Identities associated with the same brand. Can the same brand mean different things to different people? A quick search on the Internet threw up quite a few articles on the topic. Seems this is quite a hot debate in Branding circles, with no consensus among different experts. I may not have gotten a definite answer but I really liked some of the arguments put forward, in particular here , here and here .

Can a brand mean different things to different people?

The most thought-provoking argument was the one put forward by Faris Yakob in his blog where he says that “a brand is a collective perception in the minds of consumers”. In other words, a Brand only comes into being when consumers collectively start thinking of it in similar terms. By its very definition then, a brand which means different things to different people is not a brand at all. One may disagree or have different perceptions about the brand but all of that will be with regard to this single collective perception.

To me, this argument is brilliantly developed and looks very convincing. Man is a social animal and certainly does not form these constructs of brand identity solely in his own mind. At any point of time, there is always a process of social give and take where individuals, marketers and the media all add to, amend and reform the brand identity in a continuous negotiation of what that brand stands for. And it is this collective understanding that makes it a Brand.

By definition a social construct

True enough and yet not quite.

Consider the opposing argument put forward by Mr. Martin Lindstrom at this site . He points out the fact that even so- called ‘global’ brands will be perceived differently and associated with different values in New York, New Delhi and Lima. Thus, the same brand might need to tweak or adapt its messages to the local cultures in which it operates. Thus, the same brand needs to have different identities and messages to appeal to and to fit in with different groups of consumers.

To someone like myself who has seen McDonalds or MTV operating in both India and the US, this argument is absolutely understandable. To be sure, they share the same logo and there is a certain commonality in terms of the look and feel and yet, I can’t help feeling that an American walking into a McDonalds in India will be shocked. I remember reading that it is the same way with Wal-Mart in China. It is just not the same.

Mc Donalds in India: No Beef burgers served here.

Again, true enough and yet, not quite.

I believe the truth lies somewhere in between. Like the glass that is half-empty and at the same time half-full, I believe both viewpoints are right to some extent. There is no doubt that there needs to be a uniform underlying strand that permeates a brand whether it is being sold in Japan or in the US. At the same time, different people are different and to appeal to different groups marketers need to tweak aspects of the Brand identity so as to make it acceptable and attractive to different sets of people. I believe the trick here is to achieve the fine balance at which the brand messages to different groups are different enough to make the brand relevant to the different groups and yet not so different as to create confusion and dissonance as to what the brand really stands for.

How to achieve this fine balance? I have no clue. This is extremely slippery ground and my own thoughts are not very well thought through yet. In fact, my main thought in writing this entry was not to solve this debate but to see what role technology might have to play in it. (Technology and Marketing, my two favorite topics. As you can probably guess I lead an absolutely rocking life.)
To be continued in the next post.......

The world today: Technology and Marketing-2

I would stare at her for hours and hours together. Sometimes sneakily and sometimes brazenly, with hope and yet with bittersweet, breathless despair I would study everything about her. Every little detail fascinated me, from the way she would flick her curls behind her ears from time to time, the look of intense concentration that came over her face when she was working to the slight puffiness under her eyes. Every feature was studied intently, all strengths and weaknesses tallied. Every reaction was thought about and analyzed. That’s what attraction is. To an extent, that also describes the field of Marketing.

Hope, longing and despair: that familiar sinking feeling

To sell something to someone, you’d better know them inside out. Yet till now, existing methods of information collection have often yielded results that are limited in scope, offering stilted or one-dimensional views of consumers. Marketers everywhere have had wet dreams about obtaining ‘that perfect piece of information’ leading to the blindingly obvious insight that would help improve marketing efforts. No wonder then, that information is gold for most companies, helping to drive advertising campaigns, targeting efforts, consumer promotions, pricing and product development efforts.

In this search for information, the internet has emerged as a major tool in the hands of Marketers. And I am not talking about online advertising. I am talking of the usage of the internet to track and collect consumer’s information. This is a still emerging world that is murky and ill-regulated, rife with controversies related to privacy issues and the rights of individuals vs. those of governments and companies. However, those controversies aside, I believe this is a HUGE, HUGE, HUGE tool and an absolute boon for marketers. In my opinion, every company better have a strategy to take advantage of what the internet enables us to do.

The Internet: Better than Mr. Holmes

Consider the advantages of the Internet.

Firstly, it is almost universal and access to the internet is growing. Sooner or later, almost everyone (except of course for the few inevitable religious nuts) will have access to the internet.

Secondly, once all the infrastructure has been put in place, sending messages or undertaking transactions is very cheap at the margin.

Finally, and to my mind most importantly the quality of information that can be collected through the internet is more comprehensive, finer grained and qualitatively much better or truer than anything available till now. This is due to a number of different factors. Firstly, there are many motivations, opinions or suppressed desires that we may not express in public or even be aware of which will be accurately reflected by our surfing behavior. (You know what I mean when I say suppressed desires, my friend Loknath Rao is a prime example of this.) Secondly, websites can be made to be interactive, thus enabling two-way communication between the marketer and the consumer. Thirdly, the internet can be customized thus matching a particular ad or a particular web page layout to a particular consumer’s previous online behavior. In fact, there are already some indications that Google is matching search results to the previous search patterns emanating from a particular IP address. And finally, I really do believe that the quality or the integrity of the information that companies can collect through monitoring online behavior is much better than that available from other sources. (I used to work part-time as a field researcher with the Indian Market Research Bureau through college and that experience left me quite pessimistic about the quality of consumer insight that companies can get through the standard question-and-answer survey method. I have no doubt that the internet is far truer than some of these methods.)

Already things are happening. Consider Google. Every time you search something on Google, one of their servers will be recording your cookie ID (the Google cookie that was downloaded to your computer), your IP address, the time and date of your search and your search terms. Not just that, it is alleged that Google's free toolbar for Explorer phones home with every page you surf, and yes, it reads your cookie too. And it is not just Google. Companies like DoubleClick are known to be downloading cookies to your computer and monitoring your online behavior. Even programs like Real Audio, Comet Cursor, and Netscape Smart Download have been detected communicating in the background of users' computers with servers on the Net.

They are watching you

Thus today, not just a person’s online behavior but the contents of their hard drives etc. can be accessed by private corporations. When such information is matched to a person’s offline identity, it offers a much more comprehensive, 360 degree view of consumers. In fact, companies like Axion are already specializing in offering consulting services to Marketers based on their tracking of consumer’s online habits. To some this is a scary thought, but for the moment, I would like you to look at this from the point of view of the Marketer or a company.

The 360 Degree view- Much, much better now

Would a Marketer not like to know what sort of music you like or what your hobbies are? Of course they would, and not just that they would also kill to know if your favorite colour is Blue or Red, or whether you are Republican or a Democrat. Marketers would kill for this sort of information, as it can drive Product Development, Marketing, Pricing and Distribution decisions. Through your IP-address, marketers could also know your physical location and if a significant segment of people in your area are like you, then you might see stores in your area being stocked with the kind of styles, designs or price ranges that you are partial to. Marketers can also map out social networks and be better able to understand different niches or segments whose consumption behavior is similar.

Consider local advertising, something that was uniquely identified with Newspaper advertising earlier. Today, the internet can help local businesses reach out to consumers in its vicinity in a much more targeted manner than newspapers ever could. In fact, by making these ads interactive, these ads can also do a much better job at ensuring that consumers are in fact, actually reading the ad. There are many other ways in which Marketers can gain through using the internet and each would require almost a whole posting by itself. I will not try and enumerate everything, but I’ll leave you now with just one anecdote that illustrates just how the Internet can be a marketer’s wet dream.

It so happened that one day, one of my professors realized that he wanted a new mobile phone and service provider. So like all self-respecting geeks, he immediately went to the site to check up on technical specifications and read reviews put up by other geeks. After doing his due diligence, he finally decided upon a particular model and decided to order his phone. Through the cnet site, he was taken to the Sprint website where he was given a great deal on the phone and a calling plan at a discounted price. He ordered it immediately, and couldn’t have been less satisfied with the deal he got.

A Great Deal

That should have been the end of the story except that a couple of days later he ran into one of his own students who had the same phone and the same plan and had got it from Sprint around the same period for 20-30$ cheaper. When the student insisted that he had got the offer from Sprint, the Prof. decided to investigate. So this time, he logged on from an office computer and deleted all cookies. Then he went into and created another profile and started looking for a mobile phone, but this time he searched by price. He also made sure to spend more minutes looking at the cheaper phones and discounted offerings than the more expensive ones. After following this pattern, he finally settled on the same mobile phone and was again taken to a Sprint page but only this time the same number of minutes and the same phone was being offered for cheaper.

He went back to his laptop and repeated the experiment, this time searching by specifications and not bothering about price. Lo and Behold, he was offered the higher price once again.

Question: A lot of people were very angry when they realized that individuals who had their phone number could just go onto google and get a map of where they lived. (Reverse directory lookup- Does it bother you that anyone can get to know where you live if they have your number? But why should it, unless you have a unlisted number such information is already available to a determined stalker through telephone directories. Much of what the internet enables is also like that, just an online application of practices already taking place off-line- only a LOT better

Sunday, May 13, 2007

The world today: Technology and Marketing

Human beings are like cockroaches. We are a vibrant, noisy, smelly, disparate mob, always striving, always discontented and always reaching up higher, higher and yet higher. Despite all civilizing pressures and the standardized curriculum taught in most universities, humans are not and never will be fit into a single mould. There is something deep in our souls that suffocates in conformity and rebels against the status quo. To me, that is the beauty as well as the curse of the human condition. Given a choice, however, I would not have it any other way.

Humans: We come in all shapes, sizes, colours and temperaments

So what does this have to do with Marketing? Well not much, and at the same time, it defines Marketing in its entirety. When Henry Ford famously declared about the Model-T that “Customer’s can have any colour, as long as it’s black.”, it was the start of the mass production era. You can see where he was coming from, for this was the period when new ideas relating to specialization, mass production and the assembly line were just being introduced. The emphasis was on standardization to achieve economies of scale. Yet we are not yet standardized and neither will our desires or preferences ever be.

This is the basic idea behind segmentation where marketers try to slice and dice the market into broad groups who will have similar choices, buy similar things or otherwise behave in similar ways. Then they create different features, different price points and different sizes to provide different products each of which best meet the needs of these different segments. But how do you know who wants what, or who can afford how much, or even which segments are viable.

Increasingly, today it is those companies who know more about their customers and use this information well that are coming out on top in Marketing battles. Such companies are able to segment the market finer and understand meet the needs of such segments much better than their rivals. Traditionally, companies used to rely on fairly innocuous ways such as surveys, direct observations in stores or focus groups to collect information. Today, thanks to the development of IT systems and information processing capabilities, companies have a number of tricks up their sleeve to collect information on their clients. .

Consider loyalty programs or the discount cards of retailers. Whenever a consumer uses these cards for a purchase, their data is being stored and analyzed by the company. Based on such information a retailer might know that less price sensitive consumers shop on Sunday nights while weekday mornings are generally dominated by older and more price sensitive shoppers. Any company and any marketer wants to capture as much consumer surplus as it can and thus, it is but obvious that the prices of same items might be higher on weekends than on weekdays.

However, even on the same day, we might have more price sensitive customers shopping alongside the less sensitive ones. How does Ralph’s ensure that they do not lose out on the purchases of the price sensitive customers while still appropriating as much consumer surplus as they can from the ones who are not bothered by price? Perhaps they could place the higher priced products on the top two shelves while having the same product, in a slightly different size or flavor available for cheaper in the bottom row. In this way, they get both the person who is stuck up on a certain flavor and does not care so much for the price as well as the person who is willing to compromise on flavor for a lower price. Similarly, the same item might be priced differently in a Ralphs located in a low income neighborhood vs. a Ralphs located in a richer, more affluent area in the same area. All such practices have come about due to better gathering and processing of information about customers using Information Technology.

There are also many ways to get consumers themselves to report data to you. Consider the free comparison tables that are available on the Progressive insurance page. Here, consumers can compare quotes from different insurance providers. In return for such comparison shopping consumers turn over valuable information which is used to provide attractive quotes to the right customer, while funneling unwanted types to the competitors.
Similarly, every time a consumer enters a contest for a particular prize, they are not only signaling an interest in the product but also self-reporting a lot of demographic information. This information is gold for the company since it gives them a clearer idea of the particular demographics who are more interested in their products.

Today, however the world is drastically changing and developments in technology are making possible newer ways of collecting very comprehensive information on individuals and groups. More about this in my next entry.

Question: Does it bother you that you that companies might be charging certain consumers a higher price than others for the same products being bought on the very same day in the same city or even at the same store? Do you think its only fair to charge everyone the same for the same products? Well, what if these products were AIDS or other lifesaving drugs? Would you say that such drugs should be provided cheaply to poorer consumers or in poorer countries? I don't think Economics provides an absolute framework for such decisions.

Thursday, May 10, 2007

Ok, here we go now.....

Ok. That’s it. Here we go. A blog. That’s what I need to do, a blog. Start, now. Enough is enough. Things have been building up to this for a long long long long long time. RA recently announced that we could turn in our projects for the course in the form of blogs. On top of that, Shiv Sena’s main man in LA, (pic given below) actually started his own page and mocked me for wasting my weekends.

Bindumadhav- Head of California Marathi mitra mandali and Balasaheb's main man in LA

What does he know? He seems to have made the mistake that is commonly made by those who don’t know me very well. To the untrained eye, it might often seem as if I am lying about doing nothing. But rest assured, at such times the Mitra brain is in overdrive, meditating on the world’s issues.

However, for Shailesh to have carried out this underhanded piece of slander( and that too publicly is something that I cannot take. The ancient blood of the Mitra’s runs hot within me and the warrior credo demands a reply. The old Mitra code says eent ka jawaab patthar aur chunti ka jawaab mukka (a stone is the answer for a brick and a punch for a pinch) unless of course dealing with bhai-log or babban. (no need to translate, for my many non-indian fans, well they can shove it, I feel particularly warlike, as I sit here banging my laptop keys). And so, I must reply in kind, an eye for an eye and a blog for a blog.

In any case, I have been following others blogs for far too long taking vicarious enjoyment from the thoughts of the Gauravsabnis’s and the greatbongs of the world. I always knew I could write better than them if I wanted to. So ok, back to the topic, I’ll be writing my first blog entry today. Let’s go. Bring the good old Mitra intellect to bear on an interesting topic, illuminate it with dazzling analysis, and strike them down with humor. That’s it. Let’s start now. First post. Ummmmm, Ok so……………a topic, ummmmmmmm.

Oh, it’s time for my evening tea and thin arrowroot biscuits……