October 29, 2010

The path to Generi-city!

 I wished to write about a single incident but decided all four won't do any harm (There are no editors to check on me here, huh?) Last week I was sitting in class when the director of our institute while addressing us on some vague topic claimed, "We could have gone for any Xerox machine but when it comes to xeroxing, Canon is the best and there was no choice there..."
Picture this. Two weeks back I was at the general store picking up a snack to soothen my stomach and laong walked this bald guy and said, "Bhaiyya, woh Colgate dena...germi-check waali."  
A similar incident was reported by one of my friends in some other town when he asked for a Manikchand Bisleri. 
And of course, how can I forget my own childhood when I always stopped by the store at the corner of my school to buy a Milkybar Cadbury! Imagine!
Generic brands by definition are unbranded indigenous alternatives for the famed biggies yet marketers call a perfectly famous branded product 'generic'. So how does a product become 'generic'? Yes, it's a long, long way for your brand to become generic and it is composed of four steps (Yes, you can call it the Faraaz Kazi model and award me the Nobel if you really take a fancy to it!)


1) Brand identification: In the growth stage of the PLC of your brand, this step shoots up suddenly. Why you ask? I hope you're counting the dollars being spent on the exercise of brand building. As such it is new in the market, some competitors are watching you, some innovators and early adopters are trying it out and because of that you are investing in the brand with the hope of keeping it in the first quadrant of the BCG. We try to give the brand a personality of its own, to differentiate it from similar products and to add that 'extra' in the customer's mind. The real reason for Hippo using a mascot and those really jazzy colours on their different variety of packs is to make the packets stand out from the huge stock hanging from the retailer's wall. With the $10.8 billion snack market to grow to nearly 80 billion by 2013, getting cluttered, this strategy should prove more than beneficial for them.

2) Brand familiarity: In essence, it would mean the same as above but no there's a slight difference, just marginal enough that the consumer himself own't notice. Familiarity here means that the consumer has started using the brand and is taking  a liking to it. Here, we're talking about the brand building a positive or negative connect with the customer based on the experiences the customer associates with the brand. This is the most tricky stage in the process. Imagine a thirst traveler walking in some unimaginable corner of north-east India. He has exhausted his stock of water and till far, he can see nothing but the treacherous roads surrounded with dust and mud and the harsh rays of the sun egging them on. Just as he's about to give up and collapse, he sees a small stall on the road and hurries to ask for water. Faced with such a situation, he is ready to give up his aversion to tap water and moves to the dripping tap behind the shop when he sees a small refrigerator containing bottles of packaged water. He drops to his feet and is willing to pay four times for that brand. That brand has just been his saviour. Okay, keeping the hypothetical example aside, let's just say this step involves optimising your marketing mix so as to achieve maximum penetration, not yet in the market but in the consumer's mind. In essence, you are trying to bring up the customer's perceived value of your brand by associating more positive experiences. Advertising campaigns play the most important role in this regards. This builds up the brand image and positions the brand in the customer's mind more in line with what you were trying to communicate, reducing information dissonance. Have you ever thought about the second side of the coin. In the buying process for a cellphone, you would have considered more than one mobile phone before finalising on one (yeah, I bet!). The finalised phone maybe useful for what we talk next but what about the eliminated alternatives? The fact of that matter is even if you arrive at a Nokia 5230, you were familiar enough with LG Cookie Pep and Samsung Corby Plus to give them a chance to compete in your brain.

3) Brand Loyalty: Gotcha! I did mention four steps and I end up putting this all the more, over hyped term on the third step itself. Ever imagined why? Hmmm...I guess you'll have to wait till we reach the fourth step then. For the time being, how do u define brand loyalty. Keeping the jargon away, in simple terms brand loyalty occurs when the customer comes back to you. See the change in circumstances. Till now, it was you who was approaching the customer. This is where the marketing shifts from 'Push' to 'Pull'. Of course the most optimal loyalty would be when even switchers turn hard-core loyalists but this is impractical in the real world. So we take the average loyalist for your brand. Of course, by now your brand has great product dimensions, is easily available at the customer's convenience, undertakes some great promotional activities through IMC and can even charge a premium as people are willing to pay for the 'differentiation' (positioning) you have created. Remember just by bringing down the customer's sensitivity to price, you cannot close the chapter. Brand loyalty stems form all organisational factors working in synchronisation to provide added value to their customer. In the end, brand loyalty is the prime constituent of your most important asset-brand equity. My neighbour goes to the bakery in the morning to get some buns for breakfast and often returns empty handed. "Why?" I ask him. He says,"Wibs got over!". I tell him he should have opted for the bakery buns, they are just as good and he shrugs avoiding a reply.

4) Brand integration: As the earlier two steps, the last two too are marginally different. Brand integration occurs when your brand crosses that level of saturation for a customer by 'killing' other brands. In simple terms, other brands cease to exist, the customer becomes immune to their charms, offers, deals and appeals. Bingo's take on Frito Lays for their American Onion flavour involved an indirect form of competitive advertising. In the Bingo ad, the villagers bite into the chip and exclaim "Ye to apne gaon mein bhi milta hai!", meaning that it's not imported as the lying prospective groom claims. The 'groom' in reality is a metaphor for competitor, Frito Lays. Both products are made using the same recipe so they taste almost similar. On top, Bingo is offering a fifty percent discount on its pack. Yet,a majority of the consumers are going for Lays and not Bingo, Parle, Balaji or Haldirams for that matter! On a more pragmatic take, complete brand integration is not possible as other competitors are not static but will be perhaps more dynamic than you if they have the resources and capabilities to compete. But a successful brand always has a strong sail, the wind is of course supplied by the consumer's mind.

Apart from this, there are external factors affecting the level of generi-city too. For example, dynamics of the packaged water and the snacks industry are different. Bisleri not only had the first mover advantage but also fewer competitors for almost 30 years. Compare the same for Frito-Lays after being taken over by Pepsi had just a couple of years to build its brand and then there was an overflow in the Indian snacks market. Presence of too many unbranded options and easily available subsitutes (ok, I'm making Porter proud!) are a deterrent to your efforts in reaching the next level of your consumer's mind. 
It is interesting to note that in the 1980s, Ramesh Chauhan changed the look of Bisleri. PET bottle packaging was introduced for the very first time as consumers were quite sceptical about glass bottles serving mineral water. From then on the real surge in sales had started and by 2000, Chauhan noticed the brand was becoming generic. He made an interesting move, again pulling out a similar trick from the past. He modified the packaging of the product to a complex hexagonal, flat-seeved bottle. The trump card was that he got the design patented (with competition from majors like Kinley and Aquafina and surrogate alcholics) Once this was done, how can any marketer forget the 'Play safe' campaign which was launched nationally with the sole goal of attacking the competiton and make Bisleri distinctive enough to stand on its own on the shelf. The first TV advert saw a girl and a guy who were out for camping, getting naughty, almost climbing atop each other and just when things seem to take off, the girl whispers something in the guy's ears. The poor guy rushes to the chemist where the attendant is snoring and wakes him up and asks him something. The attendant returns with a crate full of Bisleri and the guy and the girl are seen lapping up the mineral water. Apart from this, Bisleri also entered new segments, especially targeting the bulk B2B base and today 60-70% of its sales come from that segement. In 1995, it was available in around 50,000 outlets but today it is available in more than 2,00,000 outlets and that includes stationery stores and beediwaalas who'll stock no other brand. From 1995, its operations have multiplied 40 percent and today it holds a 60% share of the 40% per annum growing bottled water market. Yes, it has almost trebled its distribution, to make sure when a customer asks for a Bisleri, he gets a 'Bisleri'. And that's perhaps one of the reasons it is phasing out 'Bailey' gradually from the market. With companies like Tata introducing a natural mineral water 'Himalaya', Bisleri was quick to adopt and introduce some modifications in the product and now we have Bisleri-mountain mineral water ('Mountains'-'Himalaya', got that? These marketers, tricky breed, eh?).
So at the end of the day, does it really benefit a brand from becoming generic? Yes, it does. Does it really benefit its parent? Sadly, it doesn't! There can be a lot of arguements on the statement I've just made and I'm pretty much sure of all of them but the fact is the most major disadvantage of a company's brand going generic is bigger than all the advantages put together. The answer lies in the first four cases of the article itself, right at the introduction. Have you ever imagined how much a Bisleri or a Cadbury lose out on sales due to generi-city? The mistakes of Xerox in the past when Japanese competitiors began to enter the market are not only a case of marketing myopia for refusing to change but also a lesson for marketers on the ill-effects of generi-city.

With hugs and kisses to the Consumer,                                                   
     The Young Marketer


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