Conventional wisdom says there is a direct correlation between marketing spends and market impact. But products like Nokia’s Asha, M&M’s XUV500 and Vicky Donor have shown that you can win big on a shoe-string budget. Here’s how they did it.
You have a new product and you have done your SWOT analysis. You have put together a relevant product proposition. You have resear- ched your potential buyer and know what she wants. You have a reasonably strong distribution network to reach her and you have kept a keen eye on what competition is up to. You know what your unique selling proposition is, and what makes you a better alternative to your competition. You are clear in your mind about your margin and turnover goals. Above all, you have a compelling pricing strategy.
So you are set for launch.
Think again. The real work starts now: you get only one launch to impress the consumer. You need a big bang. And the budget is never good enough.
Conventional wisdom says there is a direct correlation between marketing spends and market impact. “If a new product is supported by heavy advertising, as opposed to limited advertising, it is 70 per cent more likely to be bought by consumers,” wrote Nirmalya Kumar, professor of marketing and co-director of Aditya Birla India Centre at London Business School, and Jan-Benedict E M Steenkamp, professor of marketing at Kenan-Flagler Business School, UNC-Chapel Hill, in a June 2012 essay prepared specially for The Strategist (issue dated June 25, 2012).
That’s conventional wisdom, but in recent months, brands like Nokia’s Asha, M&M’s XUV500 and Vicky Donor have shown that you can make a big impact even on a shoe-string budget. Without exception, all of them have opted for a slow and low-decibel launch strategy but have managed to make a huge impact. They have demonstrated that a product launch is as much about branding as it is about how you manage logistics, alliances and the various channels of communication.
The reasons for choosing such a strategy have been different in each case. If for Godrej Consumer Products the issue was to put the distribution network in place before building up buzz around its air care product Godrej Aer, for Micromax, the plan was to ramp up manufacturing capability before launching a full-scale campaign around its new tablet Funbook.
Interestingly, all of these brands have restricted the use of mass media to keep the costs low and have chosen to exploit the social media to gain a head start. They have wooed bloggers and reviewers and in some cases have relied exclusively on good old-fashioned word-of-mouth. Take Hindi movie Vicky Donor launched earlier this year: a small budget film, made with Rs 5 crore and a relatively unknown assortment of actors. The movie raked in Rs 40 crore purely on the basis of word of mouth. Compare that with Ra.One, the film that may or may not (whatever your view) make it to the rolls of history for its content, but will surely be remembered for its marketing blitzkrieg, unleashed by lead actor and co-producer Shah Rukh Khan just before its release. The movie truly enjoyed a big bang launch with close to 25 brand associations, worth around Rs 52 crore. The film also generated more press for its marketing than for the product itself. The pre-launch buzz ensured the audiences flocked to the theatres but trade analysts remain divided in their views about the level of success attained by the film. While in absolute terms the return for Vicky Donor was smaller, in percentage terms it’s an impressive performance by all accounts.
Now take Mahindra & Mahindra XUV 500 (pronounced as five-o-o), also considered to be one of the most successful launches of 2011 according to The Brand Derby study of The Strategist. In the pre-launch social media campaign, M&M tried to create excitement about the product but didn’t talk about its features or try and create too much expectation around it. Various online activations simply asked users to guess the car’s name or price, revealing the car’s look in parts, instigating curiosity and conversation around the launch. Unlike the Tata Nano, which harped on the features and price before launch, XUV 500 spoke of the overall car experience the car will offer.
The post-launch advertising too steered clear of speaking about functionality or price. It stuck to the experiential realm. “The consumer was kept at the centre in all the communication pre and post the launch and his interaction with the looks, the design, the feel of the car was the key,” explained Pravin Shah, chief executive, automotive division, M&M. Possibly because the brand’s USP was considered its clutter-breaking design. When XUV 500 first opened bookings post its official launch in September 2011, the company received around 8,000 bookings across five cities, and had to close bookings in 10 days. The XUV 500 started with a production capacity of 2,500 a month.
The thinking was that it is better to have a smaller, successful launch than having it all explode in your face.
Return on investment
Rebecca Robins, co-author of Brand Medicine: The role of branding in the pharmaceutical industry, says in her paper on managing brand lifecycle, “Getting the branding right will never compensate for a poor product; but getting the branding wrong, or failing to unlock the true potential of a brand, can make the difference between good brand recognition and loyalty and great brand recognition and loyalty, thus impacting on the bottom line in terms of the difference between good ROI (return on investment) and great ROI.” A corollary to this in the context of launches would be: getting the correct launch pad and providing the brand the necessary support at the launch phase may not ensure that the brand will hit a home run, but it can surely aid the brand by giving it a certain momentum.
Now consider the Nokia Lumia and Asha series phones. Straddling the two ends of the market — one for the premium consumer and the other for the masses — the brands entered the market around the same time. The Lumia, the glamorous cousin hogged the front pages and was endorsed by Hindi movie actor Priyanka Chopra. The Asha, the earthy one was conspicuous by its restricted presence in the mass media. It is only now, after almost 10 months of being present in the market, that the Asha is being seen on air with an ad set in a college canteen.
So why was the launch of Asha singularly devoid of Nokia-esque razzmatazz, at least compared with the hullabaloo around the Lumia? Well, the Lumia is a whole new religion (it’s a Windows phone, in other words), Viral Oza, director, marketing, Nokia India, told Business Standard in an earlier interview; so it required a treatment different from the Asha range, which was conceived as a “bridge phone” — a bridge between a smart phone and a feature phone so to speak that starts at slightly over Rs 4,000.
In other words, the launch strategy is also a factor of the personality you are trying to build for your brand. “If the Lumia fashions itself as the glamorous one, then it has to been seen in the right places, in the right company. The Asha, on the other hand, needed to make inroads into the markets and first connect with the consumers on a one-to-one level,” says a brand consultant commenting on different launch strategies for the two brands. Besides, delaying the advertising can also help you to gain market insights and interpret perception to build upon your identity.
Choosing the decibel levels as well as the tone of your launch campaign, especially for manufactured goods, is as much about branding tactic as it is about a brand’s overall strategy. It is a direct play between your targeted sales and the period over which you aim to generate them. The marketing spends must then justify themselves based on the volumes to be generated. It is also a function of your backend capabilities: manufacturing as well as distribution.
Mobile phone manufacturer Micromax launched its tablet, Funbook early April this year. The entire promotional campaign, starting with engaging with bloggers for reviews, exploring various media (print, television, outdoor), retail initiatives etc was spread over a period of three months. Quite unlike the Bling campaign. The mobile phone model, designed specifically for women was promoted via a high octane campaign, with a 360-degree media coverage. The difference in the approach for the two products is explained by Pratik Seal, head of marketing at Micromax: “The choice is quite simply guided by matching the manufacturing capabilities vis-a-vis demand mapping, also generated through your marketing efforts. For instance, it is pointless to make noise about a product and not be ready with product availability.”
In the case of Bling, the product was made available to meet the projected demand following the test marketing phase. Funbook took baby steps to begin with; now, after selling 1.8 lakh units, it is on a much firmer ground, opening the doors to a large-scale promotional campaign.
| Getting the mix right |
DOs
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DON’Ts
Put together by Harminder Sahni, founder and managing director,Wazir Advisors |
Moment of truth
The point of sale is the moment of truth, where all the monies worth is known. Being available, when the consumer seeks your brand out, is absolutely imperative. So proclaiming your presence without putting in place a strong distribution network is counter effective, say experts. Take Godrej Aer, the recently launched air care product from Godrej Consumer Products stable. Says Sunil Kataria, executive vice-president, sales and new business development, GCPL, “The promotional strategy — television and print commercials etc — will be put into action only after the distribution is in place.”
Similarly, if purely skimming the market is your intention, opt for media channels that provide a targeted reach. Consider Nivea Sun, a sunscreen lotion from the skincare brand. Given that the category (sunscreen) is fairly nascent in India and largely an urban phenomenon, the company excluded television from the media mix. It was deemed an unnecessary expense.
The frequency of new launches is easily the highest for the fast moving consumer goods (FMCG) category. And yet, only few get noticed. Then many of the new launches are not exactly new brands, more often than not they are simple extensions of an existing brand. “The cost of building brands today has gone up significantly. Most new launches are for ‘extensions’, rather than completely new brands,” says Rakshit Hargave, managing director, Nivea India, explaining why launches from the FMCG category are becoming muted. This is, however, not unexpected. Unless completely new categories are being built, the launches will stay muted.
But there is also a significant opportunity to explore new media and channels says Hargave. For instance, brands can invest more in retail level activations. They can amass a wealth of information from the consumer as well share a great deal with him, making the buying experience personal, rather than depending on the one-way communication of the mass media.
That is really the essence. So far, brands have spoken about generating noise around their launches. But in the current age, when the talk has moved from monologue to dialogue to engagement, this noise can end up being a raucous disturbance. Leaving aside the cut-and-dried you-can’t-escape-my-brand approach, marketers must reach out to the consumer in spaces she operates in. For instance, bloggers, those who write about technology and tech products, enjoy popularity and following. Like Micromax, many other tech product manufacturers are engaging with bloggers. The example of Acer India can be cited here. Its chief marketing officer,
S Rajendran, spent an entire day in Mumbai engaging with bloggers about the company’s latest series with Dolby sound system.
As is evident, brands built with little or no media support were once relatively rare, but they’ve begun to proliferate in recent years, thanks to social media and the inhabitants that populate that space. But the thumb rules for a new launch remain the same: cover your flanks well; mitigate your risk as much as possible with great planning. Above all remember that your existing customers (whether they are using a free version of your product or not) are your best friends.
