Lessons of Branding from Ms. Trump

"You are Fired !!!!"

Of late Donald Trump was known more for this quote.

His daughter who has been a successful model tells how to use personal Brand.

Branding Advice From Ivanka Trump

Maybe an advice for Retail CPG companies :)

Not everyone needs to be a luxury brand, and not everyone wants to be one. I think people can spend time thinking about customer service, who their customer is, what their customer wants from them, what market niche they have to fill. Being a brand is just about reinforcing a core business

And then about using social media and networking for building the brand

I tweet multiple times a day; sometimes it’s promotional, and sometimes it’s more personal. I don’t think people like to read things that only have the appearance of being promotional. So I’ll send a message about something that I care about, a project that some organization is working on. Then I might show the soon-to-be-completed Trump Hotel in Toronto and ask for people’s feedback and opinions, or tell them about the opening of a Trump property. I get tremendous feedback, which is very helpful. It’s an amazing form of direct marketing in that you really get a sense of who your customer is, and you also get to know those people who may not be your customers yet but are aspirational and are hoping to be

Multicultural Advertisement - CPG players beware !!!

In my last post I talked about how by 2050 the multicultural deomography for North America will be close to $520 Billion.

However a recent Knowledge@Wharton article, “Cents and Sensibility: Why Marketing to Multicultural Consumers Requires a Subtle Touch,” argues that CPG companies need to be cognizant of the subtleties of the culture / nationality that they are trying to lure.

But new research co-developed by Wharton shows how ethnic-oriented marketing can backfire and even turn multicultural consumers against a product or service, as three marketing professors explain in a paper titled, "Bicultural Identity and the Dark Side of Targeting."

As per Prof Reed:

The challenge to marketers is to calibrate the ad [in such a way] that the dominant identity is reinforced with more subtlety. The idea is to pick one identity and develop symbolism that is not center stage so it doesn’t get on people’s radar and trigger an offensive reaction

There are many examples in the article which exemplify what the article purports.

I think that the companies have to be aware of the cultural and ethnic and demographic changes in their entire offering before they venture into being a global player as against a local players. Very few players are able to do that effortlessly. All 4 Ps (Product, Price, Place and Promotion) need to be customized in order to become Global.

Multicultural CPG Segment pegged at $520 Billion by 2050

While in US, I changed my house at least thrice and every time I went to a different suburb with a different locality and a totally different demograhic segmentation. I used to find it very funny that in one WalMart store near to my new house, I always found T Shirt sizes far larger than what fit me. Whereas in the previous locality the WalMart stores had more of smaller sizes. Though in the begininning I was happy thinking that my new gym regime had actually started working, I later realized that the new WalMart store was catering more to the African American customers. This made me realize that stores had to be cognizant of their catchment area and thus stock SKUs accordingly. Though it was a disappointment to know that my gym routine was not really helping it was the first time I started thinking about what Retail companies do for their store planning.

Recent Study by ACNeilsen suggests that by 2050 nearly 50% of the North American consumer population will be non white and thus it means that these companies will have to start planning accordingly.

The Multicultural CPG segment will be close to $520 Billion and I am sure that the research and development wings of the CPG companies will start working to lure these multicultural consumer segments.

The study also points out what are the buying traits of these multicultural segments:

Minority households tend to over-index on some key shopping and media metrics, compared with the general population.


Key Multicultural Buying Insights

Hispanic shoppers tend to...

• Spend more on categories for babies and children: Hispanic households account for 11.8% of CPG total spending, but 16.6% of disposable diaper sales.
• Spend more in traditional mass merchandise and warehouse clubs.
• Spend more on food consumed at home.

African-American shoppers tend to...

• Spend more on health and beauty products, like fragrance: African-Americans account for 11.0% of CPG total spending, but 20.3% of dollars spent in beauty supply stores.
• Spend more in drug and dollar stores.
• Spend more on ingredients used to cook from scratch.
• Buy fewer items on sale or with coupons.
• Spend more on food consumed at home.

Asian-American Shoppers tend to...

• Spend more in club stores: Asian-Americans account for 3.0% of CPG total spending, but 5.5% of dollars spent in warehouse clubs.
• Spend more on categories for babies and children.
• Eat outside of the home more often.

 I also suspect that by 2050 these studies will become more detailed and stop considering the culturally different Asian communities to be the same.

CPG companies go Green (not with envy)

Is there any advantage of associating your brand to a social cause? Does it affect your brand equity?

This remains to be a major debate. While there have been many examples of such associative branding, there have also been glaring failures.

While one may like that Colgate has extended its brand to Oral Hygiene - there have been many who have questioned its efficacy?

Hindustan Unilever Limited (HUL) had its social cause (venture) called "Shakti" whcih was appreciated and used by some and again questioned by some citing it as an unlawful trade practice of selling their own stuff

Though not from the world of Retail or CPG, Aircel has associated itself with Save the Tiger initiative in India. However there have been questions on how does any of that help the cause?

P&G too in the past had launched a "Shiksha" initiative. It has now gone into the Go Green campaign with a future friedly environmental push.

However what will push all these CPG giants to really be "Green" is its biggest customer WalMart.

Retail giant Wal-Mart Stores Inc. recently announced that it wants suppliers to reduce 20 million metric tons of greenhouse gas emissions by the end of 2015. Wal-Mart has also been designing more energy-efficient stores and pursuing alternative fuels for its truck fleet

Watch Out - Retail and CPG Companies are watching !!!

While working in the Analytics space, we have realized more and more that Retail and CPG Companies are most willing to buy access to accurate and timely data about consumer behaviour. Who would not want to know about:

1. Who are my consumers?
2. What is their demographic segmentation?
3. Why are they buying my products?
4. Which competetive products are they buying and why?

ACNeilsen has been one of the pioneers in providing this data and also helping the companies draw conclusions. This data also helps the companies define and improve their marketing strategies. ROI on Marketing spend is more and more becoming a key measure for the CMO.

Good news for all the CMOs across the Retail and CPG industry is here

ACNielsen Homescan MegaPanel Expansion Now Complete; CPG Industry's Leading Consumer Panel Generating Wealth of New Consumer and Shopper Insights

Customer Centricity in Retail - Love the Coupon clippers !!

When I was working in Best Buy, they started their famed "Customer Centricity" campaign and started targetting the specific customers with specific traits.

Best Buy deals for the Thanksgiving Sale were one of the high points. And the most important part of the excitement was the "super deal" like a "Laptop for $200" or "Free Webcam" etc. However after the customer centricity project there was a rumour that Best Buy wants to steer away from (and conciously drive away) the bargain hunters or the coupon clippers.

Thankfully that was a rumour, because now there is also empirical data from AC Neilsen and IRI that bargain shoppers may actually give you more sales volume.

Their Survey finds shoppers with a plan spend most money

Sabziwallah's winning abroad?

Hope you have read "Freakonomics" or even "The Tipping Point" which talk about how little and sometimes unrelated things can actually have a larger and even not thought of impact. Didn't SRK quote Albert Einstein in his film MNIK to bring out a similar point?

OK - maybe I am drifting away from my point. What has all of this got to do with Retail / CPG and most importantly about "Sabziwallahs" winning abroad?

Over the last few years the Green Revolution and Climate Change are big topics for the world. Increasingly people are becoming more and more concious of the environment and also about their own health. An effect of this has been that people in the west have started becoming more and more concious of "Organic Food" and "Fresh Vegetables".

Food which is grown locally, not sprayed with killer pesticides, and ripened using traditional techniques is becoming a growing craze. This has given a new lifeline to a lot of farmers who can sell their stuff in the local markets. This is also prompting many Food and Grocery Retailers to have a section for them in their stores.

Isn't this the victory of the Sabziwallahs? Back home still the local sabziwallah wins heavily over the organized Reliance Fresh or ITC Choupal or Spencers. But then these stores will have a seperate Market Go to Strategy and should survive and thrive.

Rin v/s Tide - the War begins

Breaking News is that P&G has now filed a case against HUL over the direct advertisement and comparision of Rin and Tide.

I think P&G does have a good case in hand because the "comparision" seems very staged in the advertisement especially if you see "whiteness".

Let us see where this goes. I am sure this is not the end of this war. More to come soon. May the best detergent win !!!!

No "More" - is this victory of the "Kirana Stores" over organised Retail?

Aditya Birla led "More" brand of Retail Stores has decided to get "realistic". The company has decided to concentrate and expand more in the Hypermart arena rather than the Supermart arena. The company has in the recent past closed nearly 70 supermart stores as they were not profitable (high rents, catchment issues and poor footfalls. Not very surprisingly, Aditya Birla group is not the only one to take this strategy. Kishor Biyani's Future group, Reliance Retail, and Spencers have also taken similar approach in the recent past. The so called boom in the Organised Retail seems to have been at least partially busted in the "Groceries and General Mart" category.

The question begging to be asked is what happened? Everyone (mostly let by "analysts" and consultant reports) believed that Retail is going to boom in India. Organised Retail which was only 7 % will go upto 25% in 5 years and that the era of Kirana or Mom and Pop Stores is going to eventually get over. There was a major scare amongst that segment of the unorganised retail too. In many parts of India there were protests to shut down these oragnised retail stores. Reliance Retail had even exited out of UP after it faced a backlash there which was supported by ill fated political parties. Kishor Biyani, Aditya Birla, Mukesh Ambani and many industry stalwarts were betting bigtime on this organised retail story. Smaller players like Subhiksha, Trinethra also entered the fray. ITC too could stay away from this. International players like WalMart and Metro firmed up their India plans.

According to a report published by PricewaterhouseCoopers (PWC) on retail and consumer industry in association with Retail Association of India (RAI), the country’s retail sector is worth $350 billion and growing at around 15% annually.

Though the interests and the story is not entirely wiped out there has thankfully been some semblance that has been brought to the thought process. The self feeding "growth" stories have been vanishing. The pshyche of the Indian consumer has now been better understood. The infrastructure lacunae of the country have been taken into account. And frankly all of this is good both for the Retail Sector and more importantly for the consumers.

Some of the main reasons why the strategy of carpet bombing the retails superstores did not take off the ground are:

1. Misconception about Catchment Area: I think many of the organised players miscalculated the catchment area. In India with a very wide network of the Kirana Stores (Mom and Pop Stores) the concept of catchment area does not go beyond half a mile at times, unless you have an assortment of SKUs which are not widely kept. Housewives who are the main customers widely believe in the convinience and familiarity as against the value of choosing the goods yourselves. This customer segment will prefer in getting the goods from a familiar store which is walking distance away.
2. Infratructure Issues: Here I think lies the major reason for some the supermarkets failing. Lack of Parking space in many of these stores makes it impossible for even the women in the working class to shop easily at these stores. This limits the catchment area even further. Many of these supermarkets are poorly designed. The floor layout is confused between stocking more and giving more convinience. Many stores don’t have the ability and infrastructure to manage “shopping carts”. This limits how much a customer can shop. So converting the footfalls into more sales value becomes difficult. Last but not the least is the way the the check out counters are built and managed is more detrimental to the shopping experience. I think the Indian shopkeeper mentality of feeling happy when people have “lined up” is affecting these superstores as well. International Retailers judge themselves by how fast can one shopper check out. Indian Retailers believe in lining up their customers and feeling happy about it. All these reasons result in poor footfalls and lesser repeat purchase.
3. High Rentals: Indians will not drive 10 miles to shop for groceries. Hence the super marts have to get closer to the cutomer. This means that the property costs and rentals are going to be more prohibitive.
4. Poorly Managed Loyalty Programs: The hurdle of credit and familiarity (main advantages of the Kirana Stores) could have been managed well by having neatly designed and managed Customer Loyalty Programs. KYC is manadatory for Mutual Funds. I wish it was mandatory for these retailers too. I will pen down more on the problems with the Loyalty programs of the Grocery Retailers in detail later. For now, I will just say that a better CRM tool will make a huge difference if one supermart has to compete with the local stores.
   

All this has led me to believe that the Kirana stores don’t have to really worry about the competition from the Supermarts for now. They still bring in a lot of value to the customers. However the number of stores are making it difficult for them to be profitable as well.

Related link on how international Retailers are thinking about Footfalls

Microsoft Enters the Target Advertising Domain with CPG Online Effect

Last Thursday of November !!!!
Thanksgiving !!!!
Holiday Time for many !!!!
Turkey for everyone !!!!

But for me ?
Working in Best Buy Headquarters !!!
Night Shifts !!!
No Turkey --- never liked it -- so it was mostly Hoagies or Pizza !!!

But one thing was common for me with all my Americal friends

The Big Friday Sale that follows Thanksgiving.
It also meant hunting for the "Star Tribune" newspaper to get hold of all the "Deals" that will be on offer.

It was fun sitting with all my friends and deciding on the "strategy" for shopping on Friday. It used to be a war plan to be executed with the same precision. We always had the same complaint - why do we have to go through so many coupons to find the right one ? Why cant they send us just what we want?

And then came this amazing opportunity to work on the "Customer Centricity" project in Best Buy. It gave so many insights into the world of consumer behaviour and also about Target Marketing based on correct segmentation. I will write more about the Customer Centricity Program of Best Buy and my experiences in the same later.

The reason for this post is that the Software Giant Microsoft has entered the exiciting world of Online Target Marketing by launching their new CPG online Effect tool in partnership with ComScore.

See the Announcement and the video here.

Target Advertising is one of the main challenges for the Retail and even for the CPG companies across the world. The times of the "Spray Advertising" are over. With so many companies and so many advertisements and promotions staring at you, it is a challenge for these companies to "catch" your eye. The game is interesting and Target advertising is the key.

If you have seen "Minority Report" you would see the future of Target Advertising with Billboards speaking out to you.

Microsoft is not going that advanced yet but at least trying to go online with the concept with help of Loyalty card purchasing and POS data.

The threat of "Privacy" is always lurking in the dark.

Maggi - Please just be "Different"

Just read on the Marketing Practice Blog that Maggi is planning to change its Tag line. I agree that "It's Different" has a lot of Brand Equity to be diluted by going the "Make a Difference" way, unless it is going to be attached to some social cause for a temporary time. Let us wait and watch !!!

Noodles - Heating Up !!!

Over the past 2 weeks I have read at various places that the Noodles market is heating up !!!

It is said that the biggest innovation to come out of Japan in the last century was "Instant Noodles" !!! Maybe a bit exaggerated but nevertheless not very far from the truth.

I still remember a gentleman coming to our classroom when I was in second grade and giving out free samples of the newly launched Maggi 2 Minutes Noodles. From then on there has hardly been any competition to the 2 Minute Noodles.

Top Ramen came in but did not yet make a dent in the 90% market share of Maggi. However now Unilever and Horlicks are venturing in this space. It will be one "hotly" contested category. With the penetration of the market to be estimated at only 30% it will hopefully be a case of increasing the pie than dividing it differently.

Rin v/s Tide - Dho Daala?

I was kind of surprised to see the Rin Advertisement which showed a direct comparision to Tide and its performance. Other than the Complan v/s Horlicks ad campaign long time back, there has never been this kind of direct advertisement!!!!

I personally do not mind a direct comparision of products as long as they are neutral and most importantly do not enter into a mud slinging contest. Do you remember the Thumbs Up adverts taking pot shots at Pepsi? - Sometimes they are fun but I think it will over a period of time erode the brand equity of both the brands.

The news is P&G is going to court on this but Unilever planned to air this advertisement over the weekend to take advantage of the Long Weekend for the courts for Holi.

Here are some reactions to this advertisement:
From the TIDE User Community forum
Marketing Practice Blog - Interesting views here

Raison d'etre for this Retail CPG Blog

I have been thinking of penning down my thoughts on the Retail CPG world for quite some time now. I have been involved with this space from the periphery of IT or BPO for over 8 years now and thus wanted a forum to voice my opinions.

The idea is to gather the news , views and opinions on the Retail CPG space. Lets see where this goes over a period of time.

Last but not the least - these are my views (wherever voiced) or snippets gathered by me and not of my employer !!!