Amul

India is one of the leading producers of dairy items in the world and milk is most preferred food item after cereals in Indian families. its contribution in GDP is also significant for the year 2006-2008 milk contribution alone was Rs 1,44,386 crore ,higher than any other agriculture produce. In terms of value output, milk is now the single largest agricultural commodity in India

Milk producers had to travel long distances to sell their produce. Due to lack of proper facilities milk get sour in traveling before reaching to actual customers, which led to a major  loss to milk producers. In order to come up with this problem a marketing agency with the name of Gujarat Cooperative Milk Marketing Federation (GCMMF) was set up by the Kaira Cooperative Union in 1973. This dairy cooperative union followed a three-tier structure at village, district and state level for procuring, processing and marketing milk and milk products. GCMMF is the largest exporter of dairy produce from India under the brand name Amul.

Anand Milk Union LTD known as Amul was formed in 1946 as a dairy corporative movement in the country. It is managed by GCMMF, which is Joint Corporation of 2.6 million milk producers in Gujarat.

Amul is a household name in Indian homes, when one thinks of Amul one reminds of Amul butter with its polka dotted butter girl, famous for its longest running advertisement campaign “utterly butterly delicious amul” . First hoarding of Amul was put up in 1967 in Mumbai. Since then Amul is consistent in targeting its customers. Positioning of Amul is “Taste of India”. It has created value for everyone in value chain, be it customers or farmers.

Amul has Competitive sustainable advantage (CSA) over its competitors. Amul’s CSA lies in its procurement  part ,the ability to collect 447,000 litres of milk every day from 2.12 million farmers ,convert them into goods worth Rs 6 crore and distribute them to 5,00,000 retailers across country ,is not easy. No other dairy in India has such a sustainable procurement network.

Managing the large scale supply chain of Amul which begins from milk producer and ends with supply to customer from retailer is very critical job. It requires lot of dedication and hard work from all members of the corporation and also distributors and retailers across country

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It is not that Amul had a successful campaign, many of its ads backfired. One ad meant to target Marathi segment during Ganpati festival had to be removed under political pressure. In another incident on advertisement in which Amul girl was wearing Gandhi cap had to be again removed. In one another incident Amul had aired an ad portraying Hussain as “Heroine addiction”, for this Amul was taken to court.

Most of Amul’s communication is based on latest happenings in the country. That is why its ads are termed different from what is that of its nearest rival, Mother dairy. Most of Mother dairy ads are directly targeted to children where as Amul’s ad are on current affairs, in which adults are also involved.

Amul has high brand equity and umbrella branding of Amul has helped the company in bigger sense. Amuls’s brand name has helped its other brands also like Mitahi made, Amul Ice creams, chocolates, Amul Kool etc. So umbrella Brand, Amul is used to build and offer value to customers in bigger sense. In literal sense, a company has high brand equity if it has multi dimensions. Amul has explored various available opportunities to reach to mass customers. It has opened a community on public forums like orkut, sponsored events like Amul voice of India etc. The brand value of Amul will surely help company to maintain the status of largest food brand in India at least for sometime in future.

Luxury Marketing

Retail sector in India is growing. It is the fifth largest retail destination in the world. Currently share of organized retail in India is 4% and it is expected to reach at 22% levels in coming years. The growth of “mall culture” and growing disposable income with young population of country has facilitated this growth. Retailers are attracting customer to their stores with attractive visual merchandising, promotions and building affective supply chain network where by they can reduce their cost and benefit customers.

Luxury marketing in India has been evolved in last few years. According to a dictionary luxury is “the state of great comfort and extravagant living” or “an inessential, desirable item that is expensive or difficult to obtain”. The Luxury retailing is showing growth figures in the world and in India, also this trend is increasing. Luxury brands are about differentiation and exclusivity.
The luxury segment has been divided into an uber premium trend and a more enlarged trend. The enlarged luxury trend is about products and services that a lot of people at least in theory could afford. The uber premium luxury trend on the other hand consists of product and service offerings with super expensive prices. Products like the worlds most expensive computer mouse from Fabstuff, Malma-sion fatware by Christofe with handles trimmed with diamonds, Clive Christian’s Imperial Majesty perfume.

There are few but emphatic factors that strengthen the concept of luxury marketing i.e. Quality, safety and security, emotional branding, do-good factor, exclusiveness etc.

The demand for luxury brands has increased phenomenally in India. The demand for luxury goods is not limited to metros but small cities like Nagpur, Jalandhar and Ludhiana are becoming new hubs for luxury markets. This can be seen by the fact that Ludhiana has more number of Mercedes cars than in Mumbai. According to one survey number of families with annual income of more than $230,000 will be more than 140,000 by 2010. These numbers clearly boost the growth of luxury market in India.

Luxury is all about experience. Luxury brands earn profit on mass customization. Exclusivity is major thing that differentiates Luxury brand from other generic brands. Luxury goods are highly price inelastic. Within span of five years, the number of millionaires in India has increased considerably. This phenomenal change has increased the demand for luxury cars, bags, clothes etc. The other major reason is that now Indian consumers have an access to all the media — the Internet, magazines, television — they know exactly what the latest products are in the world; they are totally up to speed.

A Nielsen Global Luxury Brands study (Mar 2008) reveals that India has the third highest brand-conscious population in the world - with only Greece and Hong Kong ahead of it .According to an article from ibef India is the third highest buyer of Gucci products, the sixth highest for Calvin Klein, ninth for Diesel and tenth for Fendi. Calvin Klein (34 per cent), Gucci (25 per cent), Diesel (24 per cent), Christian Dior (16 per cent), and DKNY (10 per cent) are the top brands that Indian consumers spend on.

Most of the luxury brands coming to India adopt the strategy of opening store in metro cities, first in five star hotels. The strategy behind opening up in hotels is to target their main customers i.e. SEC A class people. After successfully launch of their brand they open more number of stores in country. Currently malls like DLF Emporio, UB Mall and The Cresent mall are specially meant for Luxury Retailing in the country.

Luxury retailing in India faces certain challenges like location constrain. In country like India, rising rentals at premium location put a break for the brands to set up store because sales figures are not so high. Another challenge is limitation of FDI. Then as number of higher class and brand conscious people grow in country luxury brands cannot escape themselves in setting up store in India. Even government is thinking to increase limits on FDI for single brand outlet. Thereby we can see a positive future for luxury business in the country.

Aamir Khan: A smart Marketer

Aamir khan: A Smart Marketer

 

Philip Kotler says that “Marketing Management is the art and science of choosing target markets and getting, keeping, growing customers through creating, delivering and communicating superior value”.

 

Normally people have perception that only goods, products and services can be marketed. In reality anything and everything ranging from products to services, events to experiences, information to ideas, and people to places can be marketed.

 

Let us today talk about a new marketer in Bollywood who is known for creating buzz for every movie he makes. It is not only Aamir Khan’s acting but also his marketing strategies that make his movies success.

 

As defined above marketing is about creating value and value is created from customers. If customers pays for your products and services then your products have value. In Aamir Khan’s case, all his movies in last decade have created value. Viewers have watched the movie and praised his acting, concepts. His movies are certainly re-purchase for most of the viewers.

 

Aamir Khan has high brand equity. Brand Equity as per literature is the added value bestowed on products and services. Since Aamir Khan is able to give different perspectives to his service, in this case his acting and movies. He has higher brand equity as compared to other actors.

 

It takes dual strategy to create successful brand, one is tangible factors in this case acting, theme of movie, entertainment and other is marketing and advertising that makes brand successful brand. One of other that create successful brand is to create a point of difference. Aamir Khan has very well defined his point of reference by categorizing himself as a successful, meaningful and mature actor. In his recent movies, he has created a point of differentiation by choosing topics that has high connection with mass audience of India with movies like Lagaan. It shows that he knows very well about the target audience and their buying behavior. In his other movie TZP (Taare Zameen Par), he has touched the hearts of lot of parents, children by raising a very special issue that every child is special.

 

The other factor, which makes Aamir Khan as a brand is selectivity. He does on an average two movies in three years. So when any successful company launches its products after a long time, where the industry frequency is comparatively shorter. Then marketer creates excitement and desire to buy by marketing and advertising. Similarly, Aamir Khan’s movie creates value and viewers perceive that his movies will be blockbuster hit even before release. Fortunately, every time he is successful in fulfilling expectations.

 

Aamir Khan is has used his marketing strategies in his upcoming movie i.e. Ghajini. He has used right marketing mix. Timing of the launch accidentally is very right. Winter vacations, Christmas, new year eve, is a duration where movie by Aamir stands to be first week hit, at least. In certain multiplexes, staff of cinema houses is seen in a Ghajini look, which is a new and innovative concept to create buzz among viewers.

It is up to the viewers of the country to decide whether his new movie will be hit or not but it is proved that Aamir Khan is a successful marketer, who knows how to generate sufficient ROI on his investments.

 

ITC Bingo!

According to a study by McKinsey & Co, the Indian food market will grow two fold by 2025 with the rapidly growing Indian economy and improving lifestyles of Indians contributing in a big way to this growth. Quoting the study by McKinsey & Co, a report by the US Department of Agriculture stated "The market size for the food consumption category in India is expected to grow from US$ 155 billion in 2005 to US$ 344 billion in 2025 at a compound annual growth rate of 4.1 per cent."

 

The Indian snacks market is worth around US$ 3 billion, with the organized segment taking half the market share, and has an annual growth rate of 15-20 per cent. The unorganized snacks market is worth US$ 1.56 billion, with a growth rate of 7-8 per cent per year. There are approximately 1,000 types of snacks and another 300 types of savouries being sold in the Indian market today. Indians in the western regions eat the maximum amount of snacks, followed by the people in northern region.
"Consumers are willing to pay a premium for both value-added private and branded products, creating immense opportunities for manufacturers and retailers,' the report stated.

Potato chips and potato-based items are the most popular products with more than 85 per cent share of the salty snack market, the report said. In the organized potato chips market, some of the leading players are Pepsi, Haldiram's, ITC, Britannia, Bikano, Balaji, Marico, Dabur etc.

Bingo was launched in India on Mar 14, 2007 during the world cup time. Main aim of ITC Bingo advertisements was to create buzz among customers. Most of the advertisements of Bingo were considered vague and stupid but I feel that was the best form of communication any marketing company has ever done. Within a month of launch of initial advertisements, 70% of the viewers could recall the brand and that was their main aim. Brand recall along with 16 flavors in three SKUs helped ITC to capture 16% of market share in just 18 months.

This is the latest advertisement

 of Bingo chips, though it is very early to say that whether ITC could sustain such a growth in long term with so many flavors. The major problem with so many flavors is that if a person does not like any of the flavor, he will not even try other flavors. So much diversification might come in the path of ITC’s growth in snacks business. 

The initial offerings from Bingo include an array of products in both Potato Chips & Finger Snacks segment. The Potato Chips offerings comprise of four innovative variants inspired by the snacking habits of different parts of the country as well as Masala, Salted and Tomato flavours. Additionally a south-inspired dairy option has also been introduced under the potato chips offering. 

The offerings under the Finger Snacks segment are equally unique presentations with innovative finger foods like the pakoda inspired Live Wires, Khakra inspired Mad Angles and the specially developed time pass snack in the form of Tedhe Medhe. Each offering under this segment is available in two variants making it a total of 6 products in the Finger Snacks portfolio. 

The segmentation was mainly done on basis of the age of the people. The primary target for Bingo is 18-30 year old people, who are willing to try out new flavours more easily than the small kids. Bingo is positioned as a youthful and innovative snack.

In a survey done by ITC, it has been found that 70% of respondents liked Indian flavors like bhel, golgappas etc. Initial pricing of ITC bingo is directly frontal attack on Frito lays with pricing of Rs 5,10 and 20. Now Frito Lays has launched small packs of Rs 3. Let us see whether ITC can leverage upon its huge distribution network covering panwaalas to small kiryana shops with a similar small pack of Rs 3.

The Company distributed more than 4 lakh large racks, to display the brand at all points of sale. The racks created so much impact that even competitors like market leader Frito-Lay's introduced its own version of wafer racks. Within six months of launch Bingo was available in more than 2, 50, 000 retailers across the country. ITC made a strategic alliance with Future group according to which all retail stores of Future group like Food Bazaar, Big Bazaar, and Kishore Biyani’s Fair Price etc will store only ITC Bingo. HORECA (hotels, restaurants and cafes), entire cigarette distribution network including pan shops.

Bingo site (www.bingeonbingo.com) is a very different site with information about Bingo and its flavors. Even initially Bingo sponsored many Bingo Remix nights in various clubs.

ITC with bingo adopted a Market Challenger strategy and chose a combination of flank and frontal attack against the market leader Frito Lay’s. 

With the rise of ITC bingo in no time, Lays has revamped its branding strategy with new promotions featuring actress like Juhi Chawla, Kareena Kapoor etc. About 35 AC BEST buses in Mumbai and metro in Kolkata are now branded by Kurkure.Frito Lays again launched a new consumer promotion campaign, Chai Time Achievers campaign in which consumers could send their recipes using Kurkure. Now with the growth of ITC Bingo, Lays has launched Indian flavors like Lay’s chat street, India’s Mint  Mischief, Wafer Style etc.

 Ravi Naware, chief executive officer of ITC Foods said, “We are getting ready to launch a media-blitz for ‘Bingo’ next month. We forayed into this sector in March 2007 and our market share today stands at 16 %. Our goal is to capture a 50 % share in this sector.”

As of now Indian snack industry is about 2500 crore. Frito Lays has 48%, Haldiram has 25% market share and ITC bingo has 16% share. Rest of the market is dominated by few regional players like Balaji.

It seems to be very difficult goal. There seems to be potential problems like huge competition by Frito Lays and Haldiram. Players like Balaji might expand into national terrotiry or it could be bought over by players like Lays. The other major threat could be preference of people toward healthy snacks.

These are some of the hypothetical problems that might erupt in recent times but as of now ITC Bingo has a happy story to state.

 

Air Deccan to Simplify Deccan

Air Deccan has the achievement of first low cost carrier to 

target burgeoning middle class in India. It was termed as South West Airlines of India. It was the brand, which wrote history in the Indian Airlines sector. After the entry of Air Deccan into the Indian airline sector, people changed the way they used to fly. Air Deccan has made it possible for more than 20% of population to experience the air travel for the first time. This went well with their first positioning i.e.  “Simplifying the flying experience”.  The target customer of Air Deccan is one and everyone who travels by First and Second class AC trains. Later Air Deccan under the ownership of Captain GR Gopinath Changed the positioning to No frills carrier for middle class.  

Air Deccan made into news by launching Re1 air ticket.  It was a vision of Captain to make air travel available to all. R.K Laxman’s Common Man was chosen as the ambassador of Air Deccan. 

“My Common Man”, is one of the popular creations of R.K Laxman who lent his creation free of cost to Air Deccan.  Initiatives like Re 1 Ticket gave them thumbs up start that has eaten the market share of already existing air carriers like Air India, Jet, and Kingfisher etc. Within 6 months of entry into the market, Air Deccan had revenues of more than $ 100 million on the account of shining economy, burgeoning middle class, and frequent flying of corporate executives.

Air Deccan did not raise its price even after there is more than 70% increase in prices of crude oil. The taxes levied by the Govt. were increasing and Air Deccan was unable to keep its cashbooks positive. In late 2007 when Kingfisher bought majority stake in Air Deccan, most of the marketers thought that the brand value of premium brand like Kingfisher would dilute. However, Kingfisher very strategically kept two brands in different boxes with different names. Air Deccan was rebranded as just DECCAN with tagline SIMPLIFY DECCAN.  

Kingfisher very successfully changed the image of Air Deccan to a low cost airline with better services. Initially there were cases of poor customer service, delays, old buses used at airports etc.  I think with this takeover, Kingfisher is successful in selling different experiences under two different brand names.

 

ZARA

ZARA

Zara, a successful name in fashion industry, was established in 1975 in Spain. Amancio Ortega owner of Inditex group headquartered in Spain started now world famous retail apparel stores. Zara is known to develop a new product and set to its stores in just two weeks.

Zara has changed the way clothing industry works where deigning, production and delivery to the retailers requires period of six months. The design and distribution cycle of the company takes just 10 to 15 days in the whole process. The company prefers to invest their revenues in opening new stores instead of in advertising which is unusual strategy adopted by a company in fashion industry. The company has its own team of designers who design clothes on the emerging trends. They also customize clothes for some of their customers and design clothes on their demands. The other source of design comes from the informer, which moves around in crowd, listen to the customers’ requirement, and pass on the messages to headquarters.

Business model of ZARA is very ruthless, in case any design fails to perform well within a week, it is withdrawn and new orders of the same are cancelled. No design last for more than four weeks in the store, fast fashion seekers get encourage and they visits Zara stores more often approx 17 times than average in high street store in Spain which is three times in a year.

Zara customers are aware that a particular design will not be available for a long period so they prefer to purchase quickly. Zara success encouraged Inditex group to move outside Spain so company opened its store in Oporto, Portugal in 1988.Since than today company has presence in more than 70 countries across globe. As a result, it is now one of the biggest global retailers. Zara stores are often found crowded and out of stock during the festive season and vacation period.


Primarily there are two product lines in Zara stores men and women section. Most of the production for Zara clothing takes places in Spain, some in other parts of Europe and very less in Asian countries. Since most of the production is in Spain and other European countries, company is able to maintain efficient supply chain and distribution channel. It is advisable for company to decentralize its production for countries outside Europe; by this company can perform better in other parts also.

It is less likely for company in clothing industry to adopt vertical integration but Zara has successfully implemented it. Zara designs, produces and distributes through self-owned channels. Communication and coordination are other factors that can be termed as success mantra for ZARA.

Zara main competitors are H&M and Gap. H&M is Sweden based retailer that spent heavily in advertising and is a close competitor of Zara. H&M opens its distribution center in the country of its operations so as to cut down on lead time and transportation cost.
It would not be surprising that in a time to come Zara focuses on region based deigns. It might adopt the strategy of mass customization to offer differentiated products across the geographically separated locations. Depending on the county culture and environment, company can take its marketing and promotion decisions like in America Company could concentrate more on internet selling as American users do most of the e-commerce.
One risk that that Inditex group takes by re investing all its profits in opening new stores might work for all its stakeholders. But at the end of day ZARA is one of the successful global retailers and in near terms there is no threat to the business model adopted by ZARA.

Croma

Croma

A TATA ENTERPRISE

Croma is India’s first national largest consumer electronic and durable store (claimed by company). Normally the size of Croma stores vary from 10,000 -20,000 sq ft. Croma is owned and run by Infiniti Retail Limited, a 100% subsidiary of Tata Sons. First store of Croma came into existence in October 2006 in Mumbai. Woolworths Ltd, the Australian retail giant, provides technical support and strategic sourcing facilities from its global network. Coma is positioned as electronic mega store. Tata group plans to set up 100 stores with an investment of 900 crore rupees. As of now Croma has 24 stores in 8 cities.

The highly competitive electronic retail market demands a communication differentiator. The brand strategy of Croma is "We won't sell, we help you buy". Customers can shop for 6000 products across eight categories in a world-class ambience. The store displays are organized to provide customer in selecting the right kind of products fitting their present and future usage. The sales staff is also trained to understand the customer needs and recommend the right product to the customer.

Croma is one of the first stores of its kind to use digital signage that includes displays on TV about product features and promotion within stores, kiosks and interactive Streme home theatre system.

Digital signage is a form of electronic display that is installed in public spaces.

 Digital signs are typically used to entertain, inform or advertise (together known as "adfotainment") and in turn for brand building. (source: Wikipedia)

Indian consumer goods market is expected to reach $400 billion by 2010 and is expected to grow at 10-15%. Retail players that have incorporated durable chain format in India includes Vijay sales, Reliance digital ,Sony world, Chennai-based Vasanth & Company; Sony Mony Electronics, Plug-In Sales and Sumaria Appliances in Mumbai; and Bangalore's Pai International and Girias are other players in this segment. This segment is highly competitive so companies normally differentiate on marketing and promotional front. Tata Croma celebrates all occasions, like Mother’s Day, Diwali, Christmas etc, with offers for customer segment.
Slow down in the Indian consumer markets and now recent Mumbai attacks on Taj Mahal hotel property put the pressure on the parent company to start the cost cutting. So it would not be surprising if in a days to come companies cut down on their lights, escalators, AC is not used during known rush hours, home delivery of products is stopped as it costs lot in transportation. It would be possible that there will be less discounts and promotional offers as they used to be in boom period. Therefore, for a year or so all retail companies might see a pressure on their financial sheets.

India Post

Department of Posts functioning under the brand name, INDIA POST is a government operated postal system in India. The Indian Postal service is the largest network in the world with more than 1,55,000 post offices and 5,00,000 post boxes. The next country with the highest number of post offices is China with around 57,000 post offices. (Source: Wikipedia)

 

India post is the lifeline of millions of people in India. The first post was established by East India Company in 1766. The tradition way of delivering messages are still carried out in more or less same manner. That is why the brand India Post is losing out to its more aggressive competitors like Courier services and e-mail. 

 

Internet and e-mail are the major sources that have eaten up the market share of India post. 

 

So now the time has come to revamp the image of India post and among various initiatives of India Post is to tie a strategic relationship with Redbus.in (www.redbus.in) . Under this alliance customers can book his/her bus tickets in any of the select 160 post offices in Karnataka. This is one of its kind of alliances India Post has ever made.

 

With changing times, after the boom of technology and internet. India post has launched various new businesses to keep a pace with ever changing competitive market like the introduction of e-Post, e-Payment, Instant Money Order, Western Union Money Transfer, Track and Trace of Speed Post Articles, Online registration of Public grievances, e-IOD, Acceptance of application under RTI on behalf of the Central Govt.

So now Indian Government has decided to restructure the image of India Post with the consultation of Mckinsey. India post has hired the services of the Media company O&M to launch a new brand. 

The background color of old logo is retained to signify passion. Wings of yellow color in new logo signifies hope and joy.

The question arises why there is a need to rebuild the image of India post. The answer lies that despite being the largest post network in the world. India post is making losses of worth 1300 crore every year. 

Now there is a need to leverage upon the core strength of India Post and i.e. network. Indian postmen reaches to even to the remote areas where big corporations have not reached.

So the future opportunities for India post is like to form an alliance with corporations like banks, Insurance companies to sell their policies etc. Though this seems bit out of the box but companies who are looking to expand to rural areas might leverage upon the network of India Post. 

The other opportunity is to open railway counters in select post offices in small towns and cities so that to have second income. 

Let’s hope that with new branding strategy and leveraging upon its strength, India post starts making profits in near future.