That’s correct. The much maligned AIG brand is now in the process of rebranding itself to make over its bad image. AIG has become hopelessly tarnished after a government bailout and controversy over bonuses issued to executives in the financial-products group which busted its balance sheet.
Its TV ad shows a boy walking into his parents' bedroom in the middle of the night, unable to sleep. It's not because of bad dreams that are keeping him awake.
"I'm worried about this family's financial future," he announces. Don't worry, his dad assures him: "We're with AIG."
The problems for American International Group Inc. these days are many of its current and potential customers are worried about its future.
Conventional wisdom says that AIG brand is tarnished beyond all recognition and it has to be rebranded. But how much is this name change going to cost? Rebranding is a huge business in USA and particularly for the damaged corporations like AIG which has to reinvent itself and gain the confidence of its customers.
Does the name alone would be enough to make over its image problem? I think no. They should change their marketing and use powerful metaphors to gain back the reputation instead of just rebranding.
The global cola brand Pepsi has put in its thoughts to fine-tune its global strategies in the Indian market. In an attempt to make the macho appeal of Thumbs-up, PepsiCo India has tweaked the taste of its drink in Andhra Pradesh to match the fizzy taste of Thumbs-up.
This will help Pepsi to grab the market share of the people who opt for fizzier taste in AP. (But what about the people who have already addicted to the less fizzy Pepsi?) The brand is under pressure from its US headquarters to break the Thumbs-up’s market share.
But am not sure if the tweaked taste would be welcomed in other parts of India. As the people of AP prefer more hot and spicy food, it may work out for Pepsi in that region. (I believe that’s the reason why Thumbs-up has 80 plus % market share in AP)
At last Pepsi realized that its Global standards may not work in all the markets and brands have to regionalize their offerings to suit the local tastes just like Mc Donald’s Indianised offerings.
Hallmark greeting cards have proven immensely popular in both the UK and the United States. Catering for every special occasion – from birthdays to weddings and from Mother’s Day to passing your driving test – the cards are sent by thousands of people every single day of the year.
The signature (or ‘hallmark’) of Hallmark cards is the ‘special message’. The advantage of buying from Hallmark is that you don’t have to think about what to write – it is usually all written for you. ‘Thank you for being such a special daughter.’ ‘These birthday wishes are especially for you,’ and so on, normally followed by a rather sentimental poem inside.
While this formula may be successful in many countries, it has not proved universal. For instance, when Hallmark tried to introduce their cards in France, no-one bought them as people preferred to write in the cards themselves. Furthermore, the syrupy sentiment inherent within the preprinted messages did not appeal to the Gallic taste. After a few months Hallmark admitted defeat and withdrew its brand.
Lesson from Hallmark Brands need to acknowledge cultural differences. Very few brands have been able to be transferred into different cultures without changes to their formula. Even Coca-Cola and McDonald’s vary their products for different markets.
What would it take for marketers to move from search-engine marketing and search-engine optimization to social media?
Facebook has become a bigger source of traffic for some large websites than Google. While the social network gets a little more than a third of Google’s unique visitors in the U.S, since the summer, registered users have grown at a double-digit rate. It has also become a source of referrals for video sites as users post and share clips.
According to research, Facebook will surpass Google by 2011-2012 because the unique visitors to Facebook are growing enormously. Facebook has become a traffic source for Google as 19% of Google sessions now come from Facebook, up from 9% a year ago. At the very least, Facebook can negotiate a referral deal at some point.
But for Microsoft (which pays Facebook), it must be annoying to watch the company send all that traffic to Google.
Remember, search and social are two different things altogether. They may have some big overlap but they serve different purposes. We don’t expect Google to tell what our close friends are doing right now, and we don’t expect Facebook to tell the exchange rate of a dollar or pound.
What’s your opinion? Even if Facebook sustains its growth, can it “kill” Google?
Lets get into the real life marketing happenings. Am beginning with the case study of Kelloggs and am sure many would have read this during your management courses. But i feel it would be fine to begin with, as the case elucidates the real life example of a product that struggled in the Indian Market. Go on and read the case.
Kellogg’s is, of course, a mighty brand. Its cereals have been consumed around the globe more than any of its rivals. Sub-brands such as Corn Flakes, Frosties and Rice Krispies are the breakfast favorites of millions.
In the late 1980s, the company had reached an all-time peak, commanding a staggering 40 per cent of the US ready-to-eat market from its cereal products alone. By that time, Kellogg’s had over 20 plants in 18 countries world wide, with yearly sales reaching above US $6 billion.
However, in the 1990s Kellogg’s began to struggle. Competition was getting tougher as its nearest rivals General Mills increased the pressure with its Cheerios brand. Kellogg’s management team was accused of being ‘unimaginative’, and of ‘spoiling some of the world’s top brands’ in a 1997 article in Fortune magazine.
In core markets such as the United States and the UK, the cereal industry has been stagnant for over a decade, as there has been little room for growth. Therefore, from the beginning of the 1990s Kellogg’s looked beyond its traditional markets in Europe and the United States in search of more cereal eating consumers. It didn’t take the company too long to decide that India
was a suitable target for Kellogg’s products. After all, here was a country with over 950 million inhabitants, 250 million of whom were middle class, and a completely untapped market potential.
In 1994, three years after the barriers to international trade had opened in India, Kellogg’s decided to invest US $65 million into launching its number one brand, Corn Flakes. The news was greeted optimistically by Indian economic experts such as Bhagirat B Merchant, who in 1994 was the director of the Bombay Stock Exchange. ‘Even if Kellogg’s has only a two percent
market share, at 18 million consumers they will have a larger market than in the US itself,’ he said at the time.
However, the Indian sub-continent found the whole concept of eating breakfast cereal a new one. Indeed, the most common way to start the day in India was with a bowl of hot vegetables. While this meant that Kellogg’s had few direct competitors it also meant that the company had to promote not only its product, but also the very idea of eating breakfast cereal in the first
place.
The first sales figures were encouraging, and indicated that breakfast cereal consumption was on the rise. However, it soon became apparent that many people had bought Corn Flakes as a one-off, novelty purchase. Even if they liked the taste, the product was too expensive. A 500-gram box of Corn Flakes cost a third more than its nearest competitor. However, Kellogg’s remained unwilling to bow to price pressure and decided to launch other products in India, without doing any further research of the market. Over the next few years Indian cereal buyers were introduced to Kellogg’s Wheat Flakes, Frosties, Rice Flakes, Honey Crunch, All Bran, Special K and Chocos, Chocolate Puffs – none of which have managed to replicate the success they have encountered in the West.
Furthermore, the company’s attempts to ‘Indianize’ its range have been disastrous. Its Mazza-branded series of fusion cereals, with flavors such as mango, coconut and rose, failed to make a lasting impression.
Acknowledging the relative failure of these brands in India, Kellogg’s has come up with a new strategy to establish the company’s brand equity in the market. If it can’t sell cereal, it’s going to try and sell biscuits. The news of this brand extension was covered in depth in the Indian Express newspaper in 2000:
The company has been looking at alternate product categories to counter poor off take for its breakfast cereal brands in the Indian market, say sources. Meanwhile, the Kellogg main stay – breakfast cereals – has seen frenzied marketing activity from the company’s end. The idea behind the effort is to establish the Kellogg brand equity in the market.
‘The company is concentrating on establishing its brand name in the market irrespective of the off take. The focus is entirely on being present and visible on the retail shelves with a wide range of products,’ explains a company dealer in Mumbai.
As per the trade, Kellogg India has disclosed to the dealers its intention of launching more than one new product onto the market every month for the next six months.
These rapid-fire launches were supported with extensive ‘below-the-line’ activity, such as consumer offers on half of Kellogg’s cereal boxes. Although most of the biscuit ranges have so far been a success with children, due in part to their low price, Kellogg’s is still struggling in the cereal category.
Although the company tried to be more sensitive to the requirements of the market, through subtle taste alterations, the high price of the cereals remains a deterrent. According to a study conducted by research firm PROMAR International, titled ‘The Sub-Continent in Transition: A strategic assessment of food, beverage, and agribusiness opportunities in India in 2010,’ the price factor will restrict Kellogg’s from further market growth. ‘While Kellogg’s has ushered in a shift in Indian breakfast habits and adapted its line of cereal flavors to meet the Indian palate, the price of the product still restricts consumption to urban centers and affluent households,’ the study reports.
One of the reasons why Kellogg’s and these other brands’ passage to India was not smooth was because they had been blinded by figures. The Indian population may be verging on 1 billion, but its middle class accounts for only a quarter of that figure. However, a 1996 survey conducted by the Indian National Council on Applied Economic Research in Delhi found that the sub-continent’s ‘consumer class’ numbers are around 100 million people at the most, and that buying habits and tastes vary greatly between the Indian regions. After all, India has 17 official languages and six major religions spread throughout 25 states.
As a result, only those companies which are in tune with India’s many cultural complexities can stand a chance. One of the companies which has managed to get it right is Unilever. However, the conglomerate has had a head start on those Western companies which entered the market after 1991.
Indeed, Unilever’s soap and toothpaste products have been available in India since 1887, when the sub-continent was still the crown jewel of the British Empire. The secret to Unilever’s longevity in India is distribution. Hindustan Unilever Limited (Unilever’s Indian arm) has products available in a staggering total of 10 million small shops throughout rural India.
As for Kellogg’s, it remains to be seen whether its move into other product categories, such as snack food, will be able to help strengthen its brand. The dilemma that it may face is that if it becomes associated with biscuits rather than cereals, core products like Corn Flakes could become a marginal part of the company’s brand identity in India.
‘Kellogg’s is caught in a bind,’ one Indian brand analyst remarked in India’s Business Line newspaper. ‘It realises that cornflakes can make money only in the long haul, so it needs a product which will give it some accelerated growth and the tonnage it is desperately looking for. However, its area of strength worldwide lies in breakfast cereal and not in the snack food category.’
However, other impartial Indian commentators are more optimistic about Kellogg’s future prospects within the sub-continent. Among those who believe Kellogg’s will eventually succeed is Jagdeep Kapoor, the managing director of Indian marketing firm Samiska Marketing Consultants. ‘With every product offering, Kellogg’s chances improve based on its learning in the Indian market,’ he says. "Only time will tell."
Lessons from Kellogg’s
Do your homework. Why did Kellogg’s cereals have a tough ride in India? ‘It was just clumsy cultural homework,’ says Titoo Ahluwalia, chairman of market research company ORG MARG in Bombay.
Don’t underestimate local competitors. Although Indian brands were worried they would struggle against a new wave of foreign competition following the market opening of 1991, they were wrong. ‘Multinational corporations must not start with the assumption that India is a barren field,’ said C K Prahalad, business professor at the University of Michigan, in a Business Week article. ‘The trick is not to be too big.’
Remember that square pegs don’t fit into round holes. When Kellogg’s first launched Corn Flakes in India it was essentially launching a Western product attempting to appeal to Indian tastes. Globalization may be an increasing trend, but regional identities, customs and tastes are as distinct as ever. It may be easy for brand managers of global brands to view the world as homogenous, where consumer demands are all the same, but the reality is rather different. ‘There is a bigger opportunity in localizing your offerings and the smarter companies are realizing this,’ says Ramanujan Sridhar, chief executive officer at Indian marketing and advertising consultancy firm Brand Comm.
Don’t try and make consumers strangers to their culture. ‘The rules are very clear,’ says Wahid Berenjian, the managing director for US Pizza (which has successfully launched a range of pizzas with Indian toppings) in an article for the Hindu newspaper, Business Line. ‘You can alienate me a bit from my culture, but you cannot make me a stranger to my culture. The society is much stronger than any company or product.’ Brands who want to succeed in India and other culturally distinct markets need to remember this.
A brand is defined as a name, term, sign, symbol, or design, or a combination of them, intended to identify the goods or services of one seller or group of sellers and to differentiate them from those of competitors.
Building a strong brand requires careful planning and a great deal of long-tern investment. At the heart of a successful brand is a great product or service, backed by creatively designed and executed marketing.
From here on, am not going to post the very basics of marketing as they are available in abundance over the internet. Let us jump into the concepts beyond the basics and on the current happenings too.
You will often find that many people confuse marketing with advertising or vice versa. While both components are important, but they are very different. Knowing the difference and doing your market research can put your company on the path to substantial growth.
Let's start off by reviewing the formal definitions of each and then lets go into the explanation of how marketing and advertising differ from one another:
Advertising: The paid, public, non-personal announcement of a persuasive message by an identified sponsor; the non-personal presentation or promotion by a firm of its products to its existing and potential customers.
Marketing: The systematic planning, implementation and control of a mix of business activities intended to bring together buyers and sellers for the mutually advantageous exchange or transfer of products.
After reading both the definitions it is easy to understand how the difference can be confusing to the point that people think of them as one-in-the same, so lets break it down a bit.
Advertising is a single component of the marketing process. It's the part that involves getting the word out concerning your business, product, or the services you are offering. It involves the process of developing strategies such as ad placement, frequency, etc. Advertising includes the placement of an ad in such mediums as newspapers, direct mail, billboards, television, radio, and of course the Internet. Advertising is the largest expense of most marketing plans.
The best way to distinguish between advertising and marketing is to think of marketing as a pie, inside that pie you have slices of advertising, market research, media planning, public relations, product pricing, distribution, customer support, sales strategy, and community involvement. Advertising only equals one piece of the pie in the strategy. All of these elements must not only work independently but they also must work together towards the bigger goal. Marketing is a process that takes time and can involve hours of research for a marketing plan to be effective. Think of marketing as everything that an organization does to facilitate an exchange between company and consumer.
Advertising is any paid form of nonpersonal presentation and promotion of ideas, goods, or services by an identified sponsor. Ads can be a cost-effective way to disseminate messages, whether to build brands or to educate people about your product.
Every advertising will have a goal and it has to be a specific communication task which should be accomplished with a specific audience in a specific time.
Advertising objectives can be classified according to whether their target is to inform, persuade, remind or reinforce.
Google India started creating awareness about Internet as its internet bus hits the road of Tamil Nadu, India. This project is intended to show case the benefits of the Internet to the people and they are targeting the people with limited internet exposure.
“The bus is designed to make a simple introduction to the Internet for a new user. With a focus on the four themes of education, information, communication, and entertainment, the Internet Bus will be loaded with useful and informative content in English and Tamil. We'll showcase how the Internet can make everyday life simple through services like search, email, social networking, maps and others”
Looks like another unique initiative from the Google team and sure they’ll have the early mover advantage and carve a mind share among the new internet users.
The 4Ps (also known as the Marketing Mix model) can be used by marketers as a tool to assist in defining the marketing strategy and these are controllable variables.
1. Product 2. Price 3. Place 4. Promotion
Apart from these 4Ps, there are other significant Ps which are
5. People 6. Process 7. Physical Evidence.
These extended Ps plays a significant role in Services Marketing. More explanation on Marketing Mix will be posted in detail here. Check them back.
Marketing deals with identifying and meeting human needs in a profitable way. As
defined by the American Marketing Association, "Marketing is an organizational
function and a set of processes for creating, communication and delivering value to
customers and for managing customer relationships in ways that benefits the
organization and its stake holders"
According to internationally known marketing guru Brian
Norris, “Marketing is the ongoing process of moving people closer to making a decision to purchase, use, follow, refer, upload, download, obey, reject, conform, become complacent to someone else’s products, services or values. Simply, if it doesn’t facilitate a ‘sale’ then it’s not marketing.”
