Monday, March 14, 2011

Karizma sets tone for Hero branding strategy

The most recent promos for the Karizma ZMR motorcycle during the ongoing cricket World Cup leave out a key ingredient: its maker's name.

The sports bike is a product of Hero Honda Motors Ltd, a joint venture of India's Hero group and Japan's Honda Mo- tor Co. Ltd.

Hero and Honda are parting ways, and the Karizma promos are the first of the Indian group's new branding strategy as it prepares to go to the market alone after a 26-year partnership.

“This is a part of our long- term strategy”, said Sunil Kant Munjal, chairman of Hero Corporate Services Ltd and a member on the Hero Honda board, when asked about the Karizma ZMR advertisements at the sidelines of a conference on 28 February. “We are not rushing into it”.

Hero Corporate Services is a part of the Hero group. There is no mention of the company's name in the Karizma advertisements on bill- boards or on cricket grounds where the World Cup matches are being played.

The Hero group has previously said it would evolve its own brand after the split and enter overseas markets such as Latin America, Africa and West Asia with a new logo.

Assessing Consumer Brand Loyalty

A regional player involved in the production and marketing of various milk products. Since it was founded a decade ago, the company had grown significantly and had established a good presence in its existing market. Bikash Iyer, CEO of the company, wanted to expand the company's operations to two neighboring markets. But before that, he wanted a marketing research study conducted in its existing market to assess brand loyalty toward its products.

The study focused mainly on the analysis of marketing survey data to identify significant independent variables which have a big influence on the dependent variable i.e. brand loyalty of their products. With the data collected and tabulated, Iyer had to analyze and interpret the data and, based on this, take some vital decisions.

Bikash Iyer (Iyer), CEO of the Chennai-based SKM Pure Milk Products Pvt. Ltd. (SKM) in the southern Indian state of Tamil Nadu, was planning to expand SKM’s operations to two metros in neighboring states. Established in 1999, SKM had grown significantly and, as of 2010, had a good presence in Tamil Nadu.

Iyer planned to adopt the same strategy that had made SKM successful in its existing market for the two new markets. But before that, he wanted a marketing research study done in the existing market to assess brand loyalty for SKM’s products. He enlisted the services of a marketing research consultant for this purpose.

The study focused mainly on the analysis of marketing survey data to identify significant independent variables which had a great influence on the dependent variable, i.e. brand loyalty, for their products.

Business News

· Canara Bank to get overseas licences

· RBI asks Zoha to close India business

· HP sets up education fund for India

Thought of the day

"Capitalism is the astounding belief that the wickedest of men will do the wickedest of things for the greatest good of everyone.”

— John Maynard Keynes

Marketing Glossary

Fixed-Sum-Per-Unit Method

A method of determining an advertising budget, which is based directly on the number of units sold.

Flat Rate

A media rate that allows for no discounts.

FCC

Federal Communications Commission. The federal agency responsible for regulating broadcast and electronic communications.

Humor in Management

The manager of a large corporation got a heart attack, and the Doctor told him to go for several weeks to a farm to relax. The guy went to a farm, and after a couple of days he was very bored, so he asked the farmer to give him some job to do. The farmer told him to clean the shit of the cows. The farmer thought that to somebody coming from the city, working the whole life sitting in an office, it will take over a week to finish the job, but to his surprise the manager finished the job in less than one day. The next day the farmer gave to the manager a more difficult job: to cut the heads of 500 chickens. The farmer was sure that the manager will not be able to do the job, but at the end of the day the job was done. The next morning, as most of the jobs in the farm were done, the farmer asked the manager to divide a bag of potatoes in two boxes:
one box with small potatoes, and one box with big potatoes. At the end of the day the farmer saw that the manager was sitting in front of the potatoes bag, but the two boxes were empty. The farmer asked the manager: "How is that you did such difficult jobs during the first days, and now you cannot do this simple job?" The manager answered: "Listen, all my life I'm cutting heads and dealing with shit, but now you ask me to make decisions!"

Sunday, March 13, 2011

Family Composition Dictates Demand

The heterogeneity that characterizes the modern Indian consumer has created a maze that marketer would like to unravel in order to target their products and services precisely. In this fortnightly series, Indicus Analytics presents the various facets of urban consumers, across geographies and socio-economic groups

Looking at the sub-segments in the five main socio-economic classification (SEC) segments, the largest sub-segment of close to 7.5 million households is formed by those whose chief wage earners are married with grown-up children and who may be a skilled worker with primary school education or an unskilled worker who may have gone to college. In other words, this is the sub-segment of urban SEC D households whose chief wage earners are in their mature years. The households span a wide diversity in educational and skill back- grounds. The majority of chief wage earners are aged 45 to 65, and most have completed primary or middle school.

The low level of schooling has limited occupation opportunities--just a third of these chief wage earners are in regular salaried jobs. Interestingly, less than a third is self-employed, running their own businesses. For most chief wage earners, contractual work would be the source of income. Less than 10% of the chief wage earners have secured jobs in the government, public or private sector; the majority is in the unorganized sector in small units. Again, the sectors of employment are diverse, even wholesale and retail trade does not account for more than 20% of employment here. Manufacturing and transport and communication have provided the most opportunities for these chief wage earners.

Families could be nuclear or joint; in general, though, household size is larger than four and most of the families have minor children. More than one-third of the households have senior citizens; this segment, therefore, is one with demand of goods and services that spans all age groups. Earning potential in this segment is generally low, and three-fourths of the households earn less than `300,000 per annum.

Future Group plans exclusive food stores (Case Study)

The Future Group will open a chain of stores called Food Hall to sell only foodstuff in an attempt to tap into India's largest retail segment that's growing rapidly.

It will convert about 16 of its Food Bazaar supermarkets and two counters in Pantaloons stores into the new brand. Food Bazaar shops sell grocery to general merchandise, but the new stores will stock only food items.

“We are making food a bigger play”, chief executive Kishore Biyani said. “Customers want more assortments and variety in food”.

Food is the biggest chunk of India's $435 billion annual retail business, with a share of 70%.
Food retailing is a $3 billion annual business for organized retailers that are expected to expand to $16 billion a year in 10 years, according to retail consultancy Technopak Advisors Pvt. Ltd.