Advertising – Essential for Brand Building ?

Stretching the Rupee to the last mile should be the endeavour of any marketing organization. It is music to ears to listen to “kum karcha jyada charcha”(Little expense, Maximum returns), any penny wise pound foolish entrepreneur will fall for this sloganeering. Affordability is an issue for a start up company, but once an organization is into its take off stage after a decade’s existence, than it has really look for ways to reeve up its brand image and ensure the goodwill of the customer.

Media selection and Deployment in trade dominated Industry:

When I was heading a branch of Kurl-on at Nagpur I was faced with an akward situation of competition engulfing us in the market place. Being a dealer dominated trade, we had collection problem galore and our brand equity was being encashed by competitors for lack of advertisement. Any coir mattress was being sold as Kurl-on by unscrupulous dealers. It was akin to any vanaspati being sold as Dalda. Kurl-on was a generic product for coir mattresses.

An idea flashed in my mind to educate the English speaking segment. I contacted Hitavada and found that Rs 50 per column centimeter was the rate card. I asked them for front page advertisement. The advertisement representative gave it at the same price instead of charging regular 50% premium. Well it was a golden opportunity during the festive season. The positioning of the advertisement created a stir so to say in the market place, all dealers woke up from their slumber and they wanted their names to feature prominently in the advertisement. We had the policy of mentioning all the dealers below the corporate advertisement. This lever I used it effectively to promote the sagging image of Kurl-on, and sales literally doubled and we got rid of bad dealers. Thus Kurl-on brand was firmly entrenched in the minds of the consumer despite two strong local brands such as Rama coir and Aerocom which established their factory and had to struggle with their capacities to establish their brand.

Treating advertisement as an investment for building brand equity :

The influx of MNC brand poses a real threat to any Indian brand in the long run. Nutrine and Parrys was literally overtaken by Perfetti within a span of 4 years. The deep pockets and high profile advertising and maverick type of marketing ensured brand equity. The same example I had to give to our director in HPL, who literally woke up from slumber. The MNC competition in the form ofFaber Castle and Staedler was looming ahead. What is now the key to protect the brand equity ? He asked me casually on a market visit, my simple suggestion to him was to pump all that he can on advertising forget short time profit for a few years. It made logical sense, the advt budget which was a measely 50 lakhs was pushed up 3 crores in the first year, second year it was 5 crores and so on it was multiplied. Today the company is able to withstand the competition head on without bowing down and selling the company lock, stock and barrel. Whereas Nutrine was sold to Godrej and Parrys got sold out to Lotte.

Dependence on modern trade format to a large extent can be retarding for an organization. An optimum dependence on modern trade will boost the overall sales and consumer awareness. Excessive dependence can literally switch off the retail sales with millions of outlets. Indian retail universe for any healthy FMCG organistion should be 5 lakh plus. This would obviously comprise of Wholesale, Retailer and Modern format. Many of the companies do fall prey to the superior bargain power of the Modern format. Some mega mart offer excellent display opportunity. This visual merchandising effect lures the customer into impulsive purchase. The boost in the sales can be tremendous for short duration, but if used judiciously than the company will be able to do justice to multitude of retailers. Discriminatory Policy and consumer schemes can literally switch off sales from the millions of retailers as against a few mega mart. So it is absolutely essential to caliberate the consumer offer to niche segment or operate it on universal basis.

The feel good factor for any marketing guy to witness his product being sold like hot cake is heavenly delight. The modern trade demands, merchandising fee or rental, higher margins, exchange of slow moving stocks, etc for which any organization should be prepared. Sometimes delayed payment too is one the technique adopted by mega formats. The same situation we faced with CSD canteens. I suggested that we withdraw supplies stating production constraint, which factually we were facing. The sales multiplied in that area. If the product has tremendous brand equity sales will never be lost. This move was fraught with risk because many FMCG companies, obtain nearly 10% of the sales from CSD canteens. Nevertheless our call was based on rational thinking when we are selling the products against advance DD why should we give credit and follow up for a measely sales. It was purely a commercial decision, but if one follows the social responsibility it was a bad move.

Cadburys once had this very problem in state of Kerala, the dealers were asking for 20% margin instead of 10%. The traders union boycotted it and supplies to the market started flooding from TN. The sales trebled during the tenure from TN wherea sale was absolute Zero in Kerala. It was win-win situation for Cadburys, despite ban product was sold as hot cake under the table in black in Kerala. The traders realized the futility and lifted the ban. This is the precisely the power of branding. Even Johnson and Johnson faced the boycott situation among the chemist segment demanding higher profit margin sometime back, but they more than made up their sales from grocery and other segment. Local brands took this opportunity to entrench themselves in the market place. Shapers was one of the biggest gainers along with Whisper.

Modern trade format can be a very useful platform for new product launches, consumer sampling, product testing, research, etc. Brand managers of reputed companies employ event management firms to undertake a plethora of experiments at Malls, of with some strings attached. It is worth passing on 50% margin and ensure display of the product on the shelves rather than shelling out window display rentals. The sales expense ratio need to match, otherwise the rentals will sometimes overshadow the cost or volume of business generated. In case of food products the best way to popularize is to distribute free samples or prepared foodstuffs. I was lucky to witness Kitchens of India sampling, Pepsi, and other companies in line of this business sampling.

“I notice increasing reluctance on the part of marketing executives to use judgment; they are coming to rely too much on research, and they use it as a drunkard uses a lamp post for support, rather than for illumination.”  – David Ogilvy.

During my marketing heydays i happened to visit the corporate HQ of Unilever in connection with a tie up promotion. The directors warned me stating that the brand manager is going to demand his pound of flesh. It was my curiosity to see a brand guy at work. He has so busy with multifarious activity trying to reeve up the sagging brand. He was spending lots of time with advertisement agency guys discussing the promos, positioning and deployment. We lost the order to some local unorganized company even though we were the brand leaders in the segment. But he lost the battle to ITC with Ashirwad and Pillsbury brand establishing firmly in the market place. My theory on how Levers lost the golden opportunity to seize the market leadership is totally different. The feel good factor was never employed effectively. Just take Cadbury on the contrary, despite having controversy over nickel content and worms they were able to surmount the challenge. Just have a look at their advertisement. The feel good factor associated with the brand has helped in recovering the market share after initial set back. The company worked overtime to set its packaging, ingredients, formulation etc right. Once the feel good factor is embedded in the minds of the consumer no amount of negative publicity will snatch away the market share.

Never advertise a bad product, it will decimate the brand faster.

Disclaimer : This article does not purport to demean or discredit any organisation but focuses on educating the future generation or breed of brand managers to learn from mistakes which were committed during our times.