Re-Imagining segments

What we are seeing in India is the birth of horizontal segmentation. Brands that manage to understand the spaces between existing needs and segments are the ones that are likely to win

Nothing tests a marketer's abilities more than a new launch. In a world saturated with information, the ability to cut through to the audience and create room for a new idea in their already cluttered lives is not easy. Great launches need not only to get all elements of their mix right - and today the idea of 360 degrees seems to have many more degrees than in the past - but also connect with something real, often visceral, deep within the consumer's mind. The meaning of the launch has expanded significantly; now brands go much beyond the traditional launch-conference-with-smoke machine-and-A/V-showing-athletic-heroes-set-to-the-Chariots-of-Fire-track. A list of the most successful launches of the year tell us something not only about the strategies used by different brands to make a mark but also about consumers at large and about what their hopes, dreams and desires might be. In a country where consumption is the strongest signifier of progress at an individual level, it is not surprising to find the dominance enjoyed by the categories of smartphones and automobiles in this year's list of the most successful launches.

This year's top three positions go to smartphone brands while the automobiles bring up the next three. The next four places that complete the top 10 too are split between these two categories. The dominance of these two categories is so overwhelming that in the top 20, only two places go to other categories - fast moving consumer goods (FMCG) brands. In some ways, these categories do enjoy an unfair advantage when it comes to annual lists of successful launches, given that in these categories, product refreshment is an imperative. In some cases, it is also true that the launches are keenly anticipated by consumers which makes the marketers' job that much easier. It also helps that the success or failure of the launch is often determined quite quickly, unlike in the case of FMCG brands. On the flip side, given the instantaneous feedback that these launches receive, the launch itself becomes doubly critical. (THE MOST SUCCESSFUL LAUNCHES OF 2013)

The brands that have emerged victors have passed this crucial test well. Samsung in particular has managed to connect with the Indian consumer remarkably well - three of its launches make it to the top 10 list, including Galaxy Gear, its smartwatch. Samsung's focus on understanding India, investing in it and catering to the Indian consumer specifically has been an on-going project. In Samsung's case, while the launch marketing strategies tick all the boxes, the key to their success lies in aligning their products with consumer expectations. Today, Samsung is clearly a brand that enjoys great momentum, which means that it can expect consumers to tune in for any new move the company makes. This is both an enormous advantage as well as a potential pitfall, as other technology companies have discovered. Apple, which has faced this burden of expectations for some time now, however performed well with its iPhone 5c/5s launch. In the case of Apple, it is really a case of the brand following the consumer rather than the other way around. For many years now, the Indian consumer has borne the brunt of the brand's indifference to the Indian market and it is only recently that things seem to be changing.

Indeed, if there is one theme that stands out from among the list of successful launches, it would have to be the importance of getting the product right. Most of these launches have a a great product strategy. This is very striking, particularly when it comes to the extremely crowded automobile market. Ford EcoSport delivered a great combination of aesthetics, product features and price to make a place for itself in the SUV segment. Royal Enfield's Continental GT brought back the days of the Cafe Racer, skilfully evoking nostalgia for a time when motorcycling was at its purest, along with more contemporary engineering. Hyundai Grandi10 managed to create room between its own i10 and i20 to open up a new segment for itself. Honda Amaze marked the entry of Honda into the diesel segment; it was a late entry but again carried with it the trademark Honda attention to detail. At another level, the luxury brands strove to create a new compact segment with entries from Mercedes and BMW in the sedan and Audi in the compact SUV categories.

The other clear message that emerges from this year's list is that brands today need to think of the launch not merely as an announcement but as a platform to create a new experience for consumers. It is now virtually mandatory for brands to launch with some promotional activity that creates ripples on social media. We saw examples of this in this year's winners, be it BMW or Mercedes, which used promotions to go with the launch or Honda and Royal Enfield that used Twitter to good effect. Ford EcoSport created an interesting property called Urban Discoveries, which called upon people in 12 cities to identify lesser known cool places for a chance to win the vehicle.

Overall, what these success stories underline is that for Indian consumers today, brands need to play an increasingly sharper and more specific role in their lives. As their repertoire of choices has expanded, we are beginning to see more nuanced segmentation take shape. Opportunities are opening up in all segments of the market and rigid category and sub-category definitions are being challenged. What we are seeing in India is the birth of horizontal segmentation, where price is no longer the only way of slicing the market. Brands that manage to understand the spaces between existing needs, mindsets and segments are the ones that are likely to win.

The need is not only for differentiation but for highly targeted differentiation. The launch hoopla that surrounds brands is important, but it is not enough to merely tick the activation and social media boxes. It is only when these actions form a coherent whole and when they help build a deeper and more durable relationship with consumers that they become truly meaningful.

Santosh Desai
MD & CEO, Future Brands