Airport branding is the new rage

By Neha Kalra, afaqs!, New Delhi, June 24, 2008
Section: News Category: Advertising

With four major airports in the country being branded, the competition in this sector is hotting up...


We have seen new brands take shape and old brands put on a new face. But for the first time in Indian history, airports, the gateway to a city, are being treated as brands. Four airports are being branded currently, Mumbai, Delhi, Bengaluru and Hyderabad. The exercise has been taken up by the Bengaluru based brand consultancy, Ray+Keshavan.

What about conflict of interest with one agency handling all four airports? Sujata Keshavan, managing director and executive creative director, Ray+Keshavan, says, “We clarify to our clients beforehand that we cannot offer them exclusivity. Each of them was aware that we were working on more than one project in the same category.”

Keshavan says that airports, by their very nature, don’t compete with one another, unlike, say, the cola majors, Coca-Cola and PepsiCo. Exclusivity is vital in the FMCG sector and companies in that sector are paranoid about competition, she says. She recounts an incident when her agency was offered work on Tata Tea, but had to turn down the offer because it was already working at the time on a Hindustan Unilever Ltd tea brand.

A study was commissioned by Bengaluru International Airport Ltd (BIAL) and conducted by Ray+Keshavan for the Bengaluru International Airport. Anjana, head, corporate communications, BIAL, says, “The results showed that the new airport had to reflect all that the city stood for.” Accordingly, the logo of the airport and its terminal design represent Bengaluru’s lakes, gardens and pleasant climate.

Says Vijay Vancheswar, group head and vice-president, corporate communications, GMR Group, which has developed and modernized the Delhi and Hyderabad airports, “Branding will become very important in times to come because air traffic is witnessing growth at the higher end of double-digit figures.”

He explains, “Airports are touch points for passengers and users. This creates huge impact in terms of the passengers’ emotional, psychological and physical experiences. Therefore, branding is an essential element in providing the desired experience and recall.”

Thus, the issue is one of positioning airports as important destinations beyond mere transportation. With the privatisation of airports, developers are focusing on providing passengers a qualitatively rich experience. The result is increased competition among the airports. In this scenario, branding is important because it creates differentiators. Prior to the branding initiative of the airports, the differentiators were largely basic issues such as managing the functional needs of passengers while they were in the airport and capitalising on airport locations to generate larger non-aeronautical revenue streams such as retail and commercial business opportunities.

Talking about the branding initiative at the Delhi and Hyderabad airports, Vancheswar says, “We have tried to highlight the basic ethos, culture and the distinct character of the location in the branding.”

Mumbai International Airport (Pvt.) Ltd (MIAL) came out with a logo in August 2006. The logo is in the form of a peacock feather with CSIA (Chattrapati Shivaji International Airport) inscribed within it. The new identity denotes pride in India, focusing on people and providing quality service and global standards. “We wish to give it (the airport) the vibrancy of India, and Mumbai in particular. While being traditionally Indian, the logo bears a very contemporary look,” says Manish Kalghatgi, general manager, corporate communications, MIAL.

Arvind Hegde, senior consultant, Ray+Keshavan, says the privatisation of the airports has led to a strategic shift. He says the city, its culture, its personality and the holding company were all kept in mind while finalising a strategy for each airport. Mumbai is depicted as a gateway to Indianness. BIAL is depicted as a gateway to South India. Delhi and Hyderabad are depicted on the basis of their environmental graphics.

Hegde suggests five positioning possibilities – on the basis of infrastructure, product, execution and skills, personality and vision. He cites several examples from abroad. The Atlanta airport, he says, is an example of an airport that is robust in infrastructure and size. The airports at Amsterdam and Changi are based on strong product concepts. The Frankfurt airport depicts efficiency in skills. Perth has a personality based airport. The airports in Hong Kong and Brussels are strategised on the larger causes of improving the economy and helping Europe, respectively.

Hegde says he believes that it is necessary to socialize the airport brand with its consumers. According to him, once each airport takes it final shape, collectively, they will improve the image of the country. As in other cases, branding will create value for the owners and add to their reputation.

With airport branding in its nascent stage, one can only see a rise in the competition among private owners, with each one trying to make its property bigger than the others.

Who’s That?: The ‘new’ Band of Boys

By Neha Kalra, afaqs!, New Delhi, September 17, 2008
Section: News Category: Advertising

Ashutosh Phatak and Dhruv Ghanekar run Blue Frog, a fully equipped music production company. afaqs! talks to them to find out what it takes to bring together the best of both...


Their names may not strike a chord immediately, but their music will. They have composed music for brands such as Kinley, Reliance, Titan, Samsung Mobile and the Indian Cancer Society. They also have big ticket film projects such as Drona and Chandni Chowk to China awaiting release. They work independently as well as in a team. In other words, Dhruv and Ashu of Blue Frog have arrived.

Both had an interest in music and had their individual bands. Ashutosh Phatak sang informally in a band which he formed with his school friends. This band later metamorphosed into Orphean Revival (1989-95). Ashu, as he is popularly known, later went on to study music and economics at the University of Pennsylvania (1989-93).

He returned to India and did a brief stint with the family business, simultaneously composing music for TV serials and commercials. He soon carved a niche for himself in the industry, and in 1995, was responsible for one of the first original scores for a fashion show for Abu Jani and Sandeep Khosla (1995). This was later performed at the Femina Miss India contest in the same year.

Dhruv Ghanekar is a vocalist who trained under Suresh Wadkar from the age of nine. In fact, he had an album of nursery rhymes, called Hi Ho, released at the age of 13. He learnt to play the guitar at the age of 16 and later on, formed a band called Chakraview, which closed down in 1996. He then studied jazz at the Musicians Institute in California.

So how did they meet? “We met at a talk show in 1996, where our bands, Orphean Revival and Chakraview, were invited,” says Ashu. They kept in touch. Later, they came together to form Smoke, a music production company. Now, Smoke has given up music production and exists as a band which handles projects from time to time.

In December 2007, they flagged off a live music club under the Blue Frog banner. In May this year, the other three collaterals – the art recording studio, record labels and the music production company – were launched. Blue Frog’s other members include Ashu, Dhruv, Simraan Moolchandani, and Mahesh Mahtai and Srila Chatterjee of Highlight Films, a film production company.

Though Ashu and Dhruv work for Blue Frog, they work and handle independent assignments to make work easy. “It’s like working in the same room as composers sometimes, and at times, it’s about working out of two different rooms,” says Dhruv.

If they have to choose between films and jingles, what would they pick? Both have a soft corner for jingles as they started their careers with them. “It’s different every day, especially at this rate when we are making almost a jingle a day. Feature films obviously take time. Jingles keep us alive and kicking,” says Ashu.

The boys have a body of work in the TV space, too. They have created sonic (audio) identities for channels such as MTV, INX, STAR and Sony and audio compositions for the first and second seasons of Nach Baliye.

Individually, each is looking forward to his solo album. Dhruv is awaiting his album on world music and jazz called Distance, while Ashu is on his way to releasing a solo rock album, called The Sigh of an Angel, in October.

(In the picture, Dhruv is on the left and Ashutosh is on the right.)

(Who’s that? is an effort to highlight the lesser known talents from the advertising, media and marketing industry.)

Where is the advertising in coffee chains?

By Neha Kalra, afaqs!, New Delhi, February 03, 2009
Section: News Category: Advertising

Only a dozen years old, the coffee business clocks more than Rs 1,000 crore annually. How did it get so large without using any mass media? afaqs! finds out...

When it set out, Barista looked like an ice cream parlour. The first thing that we did after it was launched was to alter the look and feel of the brand,” recalls Alok Nanda, chief executive officer of the ad agency Alok Nanda & Co (ANC), chuckling at those early memories. The agency has been working on the account ever since, though the chain’s name has since been altered – following an ownership change - to Barista Lavazza.

That ‘early memory’ of February 2000 is, in fact, only eight years old and yet it seems to belong to another time – imagine Indian city life without the ubiquitous coffee shop: hard, isn’t it?

Though Barista’s first outlet was in Delhi’s Basant Lok, the birth of this bean-based urban, cultural revolution actually began softly in 1996 on Brigade Road, Bangalore (now Bengaluru) when Café Coffee Day set up its first outlet there. Café Coffee Day (CCD) is owned and operated by Amalgamated Bean Coffee Trading Company Ltd (ABCTCL).

This wave of coffee and froth is today made up of about 1,500 cafes that do business of over Rs 1,000 crore annually across the length and breadth of India. In other words, a new coffee shop has been opened every third day since the first CCD outlet came up in 1996. The pace of opening is, of course, much faster than that now as the business gathers momentum. CCD is by far the biggest player with 715 outlets across 110 cities and towns. Barista comes next with 200 while Costa Coffee claims third place with 50 cafes.

Even more remarkably, this retail-based, habit-changing phenomenon has occurred without any of the players spending any money at all on mass media advertising. This raises a variety of questions:

-How did the category get this far without advertising?

-How do the brands differentiate themselves without using mass communication?

-And can the business get closer to its estimated nationwide potential of 5,000 cafés without using mass media?


From Barista and Café Coffee Day (CCD), the category has swelled to accommodate newer players like Costa Coffee, The Coffee Bean and Tea Leaf Co (CBTL) and Gloria Jean’s Coffee. US-based Starbucks, the big daddy of them all, was looking at entering India through a tie-up with Kishore Biyani’s Future Group, but the deal fell through. Otherwise, ready-to-drink (RTD) packets of Starbucks coffee were being sold by PVR at some of their multiplexes, which doesn’t happen anymore. However, one occasionally still comes across a few retail outlets here and there that stock bottles of Starbucks.

UK-based Coffee Republic and Caffe Nero and Germany’s Cup&Cino are some of the other brands that are eyeing the market.

What are the forces driving this incredible growth year after year? Vishal Kapoor, head, marketing, for Barista Lavazza puts it down to growing incomes and a greater propensity to spend, coupled with an increasing amount of time being spent out of home, among other things. The larger number of financially independent women who are willing to spend has been a big boost - as have international lifestyle aspirations, driven by growing media consumption.

Although their fares may appear similar, coffee retail chains seem to be drawing different kinds of consumers. CCD’s core target group covers a demographic span between 15–29 years, and consumers who are young, and young at heart. Free-spirited, this set of people wish to have collective fun, believes the company. For this lot, CCD is a social hub where they like to engage in meetings, discussions and celebrations, all over a cup of coffee.

One peep through Costa Coffee, and you know that it caters to the premium end: this coffee chain seats mostly corporates and business people, above 25 years of age.

The typical Barista customer seems like somewhere between the two other types. The chain is frequented by the young adults, aged between 19 and 35 years, both young men and women, who have global lifestyles. These people also spend a lot of time out of home.

Wouldn’t advertising help the brand define itself even more sharply on the consumer’s mind? “Our challenge,” responds Bidisha Nagaraj, president, marketing, CCD, “is not so much awareness as creating a deep engagement with the consumer.” She points out that CCD has created a brick-and-mortar social network – “a new way of socially networking that does not need advertising to create interest,” she argues.

In any case, says Nagaraj, “Café Coffee Day is India’s largest youth aggregator. We aggregate, on an average, 500 consumers per day per café, leading to a whopping 10 million consumers in a month across the country. I doubt there is any other medium that can promise this type of targeted reach for a brand like us.”

Although none of the other brands have the heft that CCD has, their logic of staying away from mass media is similar. Anil Laroia, chief operating officer, Costa Coffee India, says that coffee chains have traditionally relied on word-of-mouth publicity, customer loyalty and the presence in appropriate locations. “Also, while people like to experiment with food – which is why quick service restaurants need to advertise – they tend to stick to their favourite cuppa.”

Dina Mukherji, head, marketing and communications, CBTL, chain of Blue Foods, says that international brands promote themselves in a way that yields better ‘talk’ value than campaign value. The concept of coffee culture is more linked with the mood of the consumer rather than the need (hunger) and it is the experience that is sold wrapped around the perfect cup of coffee. “This is best sold in person than on television,” she adds.

If a coffee retail chain does not advertise, how does it communicate with customers, both existing and potential? The main vehicle of communication is the outlet itself which acts as a live, three-dimensional hoarding. That is why the coffee chains worry themselves silly about the nuance of every shade they use and the lighting employed at their outlets.

When ANC set out to create Barista’s look, the strong orange colour of the logo, portraying an intense visual identity, was teamed with a deep brown signifying coffee. A triangular dollop was used as a symbol or seal. To emphasise the logo, ANC broke it up and emphasised its parts across the outlets. The orange colour was used on the walls. A sketch of a cup of coffee has been used on its menu cards. And all these elements have obviously, become a symbolic representation of the brand.

Similarly, CCD, with its bright red and purple colours, stands for the buoyancy and youthful spirit of the brand. Couches have red and purple cushions. The bright red also finds place on the walls.

Costa’s deep brown colour, and dimly lit ambience is a perfect place for executives – the kind of place where you are likely to spot one whole bunch of open laptops. A mix of brown pastels is what stands out starkly in Costa. Furniture and floor tiles in light brown, dark brown sofas, deep brown walls, with neatly stacked newspapers, is a must-visit for every corporate executive.

All coffee retail players exist in more than one format across the country, and the kind of formats that each of these run vary from one coffee retail chain to another. CCD, for instance, runs residential, highway, airport, educational institute, flagship, lounge, mall, hospital, and 24x7 cafes. Barista Lavazza, on the other hand, has divided all of its outlets into just two broad categories – Espresso Bars and Barista Crèmes.

Kapoor of Barista Lavazza says that there are three ways to distinguish the brand experience:

Constantly refresh the look of the store – every couple of years change the signage, the wall colours, furniture and graphics.

Regular activity to refresh the store experience: celebrate events and activity that is relevant to the target audience.

Innovate on food and beverages using an understanding of the consumer (Barista Lavazza launches a new line of F&B every quarter). These F&B launches are supported with marketing collaterals.

A B2C business without marketing communications in mass media is a most unusual situation. Even more so is Café Coffee Day’s view, in which marketing is an earner as well as a spender. Owing to its huge youth aggregation, CCD targets brands or companies that want to reach young affluent consumers, using the retail chain’s platform. This has become a steady source of income for CCD.

Mass communication hasn’t been used thus far in the category because, reasons Nanda of ANC, “While advertising is a powerful communication weapon to build brand awareness, and also to build top-of-mind recall for an impulse purchase, it’s rather weak when it comes to building loyalty compared to other means of communication – such as experience design.”

All right, but if he had to take a guess at the first major campaign that might break for the category, in what medium would it be? “I would certainly leverage the web,” thinks Nanda.

Nagaraj of CCD dismisses mainline advertising to help her build her brand but says that “we may look at a few vehicles such as radio for increasing footfalls for specific activities.” While on the subject of looking at the future, Raj Kurup, head of Creativeland Asia, CCD’s creative agency, reckons that for a chain that has already brought its positioning alive through the experience offered to the customer on-ground, there could be two possible routes: “Either a brand-led promotion to strengthen affinity and loyalty towards the brand or a proposition-led theme whereby a specific offer is communicated to build walk-in.”

Sundararajan Rajagopal, president and director on the Board of Citymax Hospitality India, the master franchisee for Gloria Jean’s Coffees, reveals that Gloria Jean’s does utilise TV advertising in the various markets it is present in (apart from India). “Once Gloria Jean’s has a pan-India presence, we would take the same route,” he says. As of now the brand is present only in Mumbai and Bengaluru.

It is clear why café chains have taken the experience-based route to grow the business. But though advertising as a weapon seems to have been ignored for now, it could be used in the future to create buzz. Also, if the category is looking at a potential of 5,000 coffee shops, can the players achieve that, continuing the way they have so far? Maybe, maybe not. As of now, it’s the waft of aroma – rather than the lure of advertising – that’s inviting the consumer to take a sip.

The Networking Factor – Manish Vij, Co-Founder, and Business Head, Quasar Media

Daniel Goleman in his book, Emotional Intelligence, says that people’s social abilities are getting worse because of increasing work pressure, distance and less communication between friends. But I see social media as a solution to this problem.

The rise of social media networking websites has given a platform for friends to keep in touch and stay connected without spending much of their precious time. The whole process has become so much fun and ‘in’, that almost every netizen has an account on two or more of the social networking sites in India. The virtual social interaction is increasing now and friends who had lost touch 10-12 years back can search for each other and keep communicating with each other on a real time basis.

This new boom in social interaction has also led to an increase of visitors at the coffee shops at the corner of the roads. The more friends you connect to, the more you meet, the more places you need to meet and therefore more traffic at coffee shops.

It has become very simple for people to ‘Ask’, ‘Schedule’ and ‘Meet’ via these websites. The crowd on these social media networking websites also differs as they differ at the coffee shops. For example, you will find the ‘MySpace’ kind of artsy/hipster crowd more at ‘Mochas’ whereas ‘Barista/Costa Coffee’ attracts more of ‘Facebook’ types that are business professionals, book club members and students.

Also, what’s interesting is the way these coffee shops are using social media to help their businesses grow. Every coffee shop has a community or two by its name on these websites. These communities are either user-built or set up by an evangelist.

Special: The Big Question: Will it Catch On?

By Neha Kalra, afaqs!, New Delhi, September 15, 2009
Section: News Category: Marketing

The premium hatchback is trying to close the gap between premium-ness and affordability. afaqs! takes a dig...


The Indian consumer has always been obsessed with the sedan - the big car – probably because it is traditionally associated with status, power and prestige. On the other hand, the hatchback was always considered to be the sedan's poor cousin. Therefore, while the sedan is the desirable car, buying a hatch usually implies a compromise.

As in India, in other developing markets as well, such as South America, Africa and some parts of Asia, car manufacturers have had to roll out sedan versions of their smaller vehicles. But not in developed markets, such as the UK, the US and even Japan, where a premium hatchback is associated with as much luxury and status as a sedan.

It might be a little premature to pass a verdict, but it does seem that India is coming of age, where its perception of the hatchback is concerned. Twenty-four years after the first hatchback hit the Indian roads - Maruti 800 was priced at only Rs 48,000 - the hatchback is slowly turning out to be a premium possession.

The new member in this segment - Honda Jazz - is trying to change the rules of the game. The base model of the car is priced (ex-showroom) close to Rs 7 lakh, much more expensive than many an entry-level sedan.

In comparison, a base model of Hyundai Accent comes at an ex-showroom price tag of Rs 4.8 lakh. Similarly, Maruti Swift Dzire - the sedan version of Swift, a premium hatchback - is available for Rs 4.6 lakh.

In 2005, Maruti Swift tried to turn around the hatchback segment, which had seen entrants such as the Hyundai Getz and Ford Fusion. Its looks, space and speed were comparable to a sedan.

The most visible difference between the hatch and the saloon is the boot space, which makes the latter a big car.

Also, a closer look at the growth of both, the hatchback and sedan, segments reveals that considering time to be a constant factor, the ratio of expansion of both the segments (in terms of prices) has been the same.

However, in terms of functionality, the premium hatchback is trying to match the sedan in all respects, be it power, speed, performance or even space.

Auto expert and editor, Autocar India, Hormazd Sorabjee says, "Today, there are hatches that offer as much boot space and leg space as a saloon." Maruti Swift, a hatchback, and its sedan version, Maruti Swift Dzire are based on the same platform. The price difference between the two is only Rs 60,000. Interestingly, the hatchback, in this case, sells more than the sedan. If 9,000 Swift hatchbacks are sold in a month, Dzire sells around 6,000 units.

Now, Honda Siel has tried a similar route. The new Honda Jazz is based on the same platform as the Honda City, the entry-level sedan from the company. However, Honda Siel has gone a step ahead and sells the hatchback at the same price as that of the sedan. Honda Siel raised the price of Honda City, just prior to the launch of Honda Jazz, and introduced Jazz for the same price.

"In fact, in most South East Asian markets where both Jazz and City exist, Jazz is priced higher than City," discloses Anita Sharma, general manager, marketing communications, Honda Siel Cars.

According to Sorabjee, more than functionality, what differentiates the hatch from a saloon is the status attached with each one. "Moving upwards from the bottom of a pyramid, the premium hatch would be a form of upgrade, but will continue to be a downgrade from the sedan segment," he adds.

The belief is that the sedan will continue to be associated with status and prestige, though the hatch could walk with a little more pride.

An ex-advertising professional and now a brand consultant, Cajetan Vaz rightly puts it. "It's almost like reverse snobbery. A old hatchback owner can show off his premium hatchback with pride. And for a sedan owner, a premium hatch is to make a statement that he chooses to ride a premium hatch, as he has been able to get convenience coupled with style."

For functional products, it is about value for money. But for products that are both functional and lifestyle, it is the other way round. And it seems that the premium hatchback is trying to close the gap between affordability and premium-ness, personality and style.

Jagdeep Kapoor, chairman and managing director, Samsika Marketing Consultants, opines, "There is a misconception amongst automobile companies that consumers look for value for price, when truly, that is not the case." He adds, "Indians have become world-class consumers. They don't mind indulging in products that become a lifestyle statement. Just like cosmetics, jewellery and attire, cars also belong to this category."

So, the premium hatchback segment is slowly trying to find its space in a price-conscious market like India.

Shashank Srivastava, chief general manager, marketing, Maruti Suzuki says, "There is certainly a market for this segment, but I strongly feel that India is not prepared for it yet. So, the growth of the premium hatchback in India might not be as fast as in developed markets."

People from the automobile industry concur that Jazz and the likes cannot be targeted at first-time buyers. And, the number and percentage of first-time buyers is on the rise - according to SIAM reports, in 2007, 38 per cent of car buyers were first-timers, in 2008, it was 44 per cent.

The opportunity for the Honda Jazz and the likes lies in the sedan buyers. But Honda needs to grapple with the fact that the A3 (sedan) segment, at 18 per cent for five years (swinging between 18-20 per cent, precisely), is not yet saturated. The prospective buyers continue to be the hatchback segment buyers who would consider the sedan as a natural upgradation, from an aspirational perspective. The percentage of this set of people is as high as about 80 per cent.

Sharma of Honda explains that the premium hatchback "is definitely targeted at the cream of the society. It is the youth, who, if given the money to buy a sedan, would prefer to opt for a hatch - probably the sons of the owners of the BMWs and Honda Accords." Considering that the company has got almost 50 per cent of its bookings from its existing Honda customers, it seems that Honda couldn't have made a safer bet.

However, the success of Jazz and Swift could open up a new market for the hatchback in the country - the premium one. It all depends on how the Jazz does, actually.

Gaurav Gupta, director, marketing, General Motors (GM) India, concludes, "If Honda is able to do a good job at whatever it is at, challenger players will get to have a piggyback ride on the success of established brands, such as the former."

Special: The luxurious touch to telecom

By Neha Kalra, afaqs!, New Delhi, September 25, 2009
Section: News Category: Advertising

A network service is a mass product. Could it have niche and innovative angles for the 'creamy layer'? The answer lies in the future. afaqs! takes a look..

This is a problem that handset makers do not face while targeting the super rich. Neither do marketers of fast moving consumer goods (FMCG), consumer durables or even financial services. Telecom services, interestingly, is the only category where there is no distinction per se, in the offerings to customers despite a difference in income levels. Or is there?

The very fact that a telecom company has nothing 'extra' to offer to its high income customers, stems from the fact that companies offer broadly two services -- voice and text (or video, MMS) -- and neither of the two services is priced on the grounds of income level. The pricing strategy, being a clean, well-laid out one, applies to all alike. But do they want to target specific SECs?



The great leveller?

For starters, one could begin with looking at the intent of the telecom companies tapping consumers of diverse income level groups in various ways.

Shireesh Joshi, director - marketing, Bharti Airtel, is clear about the brand not being skewed towards any particular income level group. "We choose to focus more on the larger opportunities, rather than niche ones. That rules out the option of us looking at targeting SEC A in particular. Neither do we wish to uniquely create something like this."

Mass media advertising by telecom brands is targeted at and consumed by one and all, in the same fashion, irrespective of their income. Press coverage in key business dailies is considered a way of reaching out to the upper rung of the society. Brands may have supplementary plans too.

Idea Cellular, for example, apart from using one-on-one interactions with its high profile customers, offers ground engagement of mass events such as the Idea IIFA Awards (an award ceremony awarding excellence in cinema) and similar meet-and-greet hospitality opportunities for this stratum of consumers.

Pradeep Srivastava, chief marketing officer, Idea Cellular reveals that about 100-200 VIP boxes are reserved for select high-end customers, channel partners, distributors and contest winners at such mass events.

Sanjay Behl, group head - brand and marketing, Reliance Communications understands that micro-targeting a customer segment is integral for optimising marketing investments on a vast array of products and services.

Reliance Communications has been using a combination of sharply-segmented conventional mass media platforms and a highly focussed direct marketing approach, for engaging the SEC A target group with its offerings.

Behl brings out the instance of the launch phase of Reliance's wireless broadband services - Reliance Netconnect. It was launched through the digital medium and a database driven direct mail initiative. A targeted mass media plan was supplemented with product demonstration through corporate road-shows in the top 45 cities and demo-kiosks in relevant retail shops.

Kumar Ramanathan, chief marketing officer, Vodafone Essar, understands that the brand can definitely have segmented engagement targeting various income level groups, but not segmented communication.

Anything more than this provided to a small segment of consumers, would be incongruent at the brand level, the obvious reason being that network service is a mass category offering.

Vodafone UK, for instance, has been the title sponsor and official mobile partner of the McLaren Mercedes team since 2007. The brand's commitment to the Formula One World Championship is in line with the significant appeal for the sport for Vodafone's customers around the world. Though the sport is considered an elite one,
Ramanathan believes that it reaches out to a very large segment.

Involving its customers from India, Vodafone had Lewis Hamilton of the McLaren Mercedes team, flagging off the McLaren Mercedes - Race to Abu Dhabi promotion in New Delhi in August. Sixteen lucky participants will win a trip to Abu Dhabi to attend the final of the 2009 Formula One Grand Prix season on November 1, 2009. The promotion is being run over 16 rounds.



Waiting for 3G

A significant landmark in the Indian telecom industry would be the much-awaited 3G. With it, the game is set to change drastically in the mobile space. With higher speeds, and plush services such as live streaming of television channels (mobile TV), the SEC A class is undoubtedly to be a beneficiary of the best that 3G would have to offer.

Ramanathan is sure that 3G will make waves in the kind of services network service providers would be able to offer - experience would have a major role to play. Difference in income levels would be the key driver.

The second, and most important factor that comes into consideration while taking specific strata targeting (in this case, SEC A) into account is the spread of costs. The enormous amount of investments in technology, does not allow telecom companies to offer differentiated network. The system and processes have to be geared up for everybody, which does not make it a feasible option to offer any benefit to a particular set of people on the network front.

The two platforms used for interaction on a mobile phone -- voice or text (video or MMS) -- help a telecom operator determine the usage pattern, as well as the kind of handset the consumer utilises, which proves as a broad indicator of the profile of a mobile user. "It is a window through which we observe our consumers," reveals Srivastava.

For the rich, it is simply the intensity of the consumption of the services offered, that varies -- the usage of services such as voice, text, MMS and, most of all, GPRS (General Packet Radio Service) through mobile handsets by SEC A is comparatively higher compared to other segment of consumers.

At Airtel, there are multiple levels of messaging - text messages are sent in a targeted manner while there is a mix and match of products and services offered. Consumers are offered some products and services based on their profile, as well as their consumption pattern of various products and services.

Joshi of Airtel clarifies that "there are no 'big' products that are offered by us for consumers with higher incomes. In any case, many more people will be moving into the SEC A classification in the near future, bridging the gap."

Looking forward to 3G, targeting the SEC A would become easy for telecom operators considering the kind of an upper edge it would bring in. It could also bring in more concerted efforts for getting the plum audience. However, the other rules of the game cannot be overlooked.

It remains a question if SEC A would gain more significance with 3G especially in a mass category product such as network services.

Brand Makeovers: A Question of Look and Feel

By Neha Kalra, afaqs!, New Delhi, October 12, 2009
Section: News Category: Advertising


A new face means a new story. afaqs! take a look at some of the notable brands that underwent a change in their visual manifestations...

In business, treading the 'new look' path is imperative because such makeovers, sometimes make a huge difference to the brand. If nothing else, it keeps the brand's image alive as a contemporary one.

Over the last decade, brand logo changes that have taken place across categories seem to have followed a pattern or have been instigated due to significant reasons. Here's a close look at some of the major logo makeovers in the last decade.

There are many brands that don't change for years. Fast moving consumer goods (FMCG) companies such as Hindustan Unilever Ltd (HUL), Dabur and Godrej have been run as heritage companies. So have their brands. The dilemma with most heritage brands was that the mammoth loyal user base had got used to the historic look and feel. That was what kept them from changing for a long time.

However, even heritage brands need a makeover, sometimes desperately. In the words of Ashish Mishra, chief strategist and head, Water Consulting - the design arm of the Mudra Group, "The last decade-and-a-half saw many of these, invariably threatened by a challenging, new competitor or shrugging off the past and making themselves over. The new identities were driven by a compulsion to convey technology and aesthetics to sustain leadership in their categories."



Looks Matter

Dabur came up with a new face in 2004, Hindustan Lever became Hindustan Unilever (its popular soap brand - Lux - had already undergone a facelift in 2004) with a fresh, new logo in 2007 and Godrej went in for a makeover in 2008 after 111 years. All of this made news. Though not strictly an FMCG company, Mishra feels that Godrej's "new brand identity was conceived to align it to the progressive future. The hope and optimism, brightness and cheer were values chosen to offset a old and ordinary past."

The banking sector has seen re-branding on an extensive scale in the last decade. However, it was restricted mostly to public sector banks. The first bank to go in for a re-branding effort was Bank of Baroda (BoB), in 2005.

What also tipped the decision was the fact that it caters to the NRI Gujarati community, and, among Indian banks, has the largest number of branches overseas.



The public sector banks had a big motivator in the form of private sector banks. The latter's modern and smart approach was beginning to swallow the consumer share of the latter. The private banks were attracting the young, the public sector banks were clearly not.

Sujata Keshavan, founder of the Bengaluru-based Ray+Keshavan (it is part of the WPP Group now), which redid BoB, understands that the youth is important, and they seek smarter brands. "Earlier banks were not seen as brands. To be number one now, they have to have the young people love their brand." Jammu & Kashmir (J&K) Bank followed BoB's footsteps in 2006 as did Unit Trust of India (UTI) Bank that went for a massive makeover by becoming Axis Bank in 2007. Union Bank and Canara Bank too embraced a new look in 2008.

The automobile sector also saw brand alterations. Ford and Hindustan Motors went in for new visual expressions in 2003. A change in logo in 2004 was a significant one for Bajaj Auto - it came after about 40 years for the brand.



Recently, the Rs 5,000 crore conglomerate Videocon, went for brand refreshment. The new 'V' has two animated green, lava-like shapes called Chouw and Mouw, both of which have distinct identities.

The telecom brand Airtel changed its logo thrice in the last decade. In 1999, it got its first new logo with the tagline - Touch Tomorrow. In 2002, it went for a switch in identity for the second time, and its tagline changed to Live Every Moment. The third logo change was incorporated in 2005, and it was about Express Yourself. The logo for Bharti Enterprises also underwent a change last year.

The beverage players wanted a change too. PepsiCo changed the logo for Pepsi and Mountain Dew in 2005 and 2006, respectively. Coca Cola also changed logos for Fanta (last year) and Thums Up (this year). Two brands of Shaw Wallace & Co - Haywards 5000 and Knock Out - saw a refurbishment in logo in 2005.

Britannia changed the logo for six brands within the last two years. Three of them - Marie Gold, Treat and NutriChoice - came up in 2007. Tiger Biscuits and Pure Magic had a new logo last year. Bourbon wore a new look this year. Ashwini Deshpande of Elephant Strategy+Design, the agency that re-designed the logos for each of these brands, says that it was in line with Britannia's new line of thought of refreshment.



On the bandwagon

Even media had its share of makeovers. The daily, Hindustan Times, underwent a change this year. It was not just a change of logo incorporated by the brand, but also a change in content, layout and design. Channels like Zee, STAR Sports, STAR World, STAR Movies, Animal Planet and Discovery, unveiled their 'new' look.

Not to be left behind, associations and agencies too thought that a makeover was a good idea. The Advertising Agencies Association of India went for a logo revamp in 2005, as did Tribal DDB. The Media Edge was rechristened TME with a new logo. Mindshare and Rediffusion Y&R got a new logo in 2008. Retail giant Shopper's Stop had a brand makeover in 2008, and also had a new logo as part of the effort.

Brands in the aviation sector, apparel segment, and across other categories, have gone in for a change in logos in the last 10 years quite willingly. With categories evolving and brands looking better, the decade that went by, has seen it all.

Special: The Telecom Jungle

By Prajjal Saha and Neha Kalra, afaqs!, New Delhi, December 01, 2009

Section: News Category: Marketing

The new telecom companies marching into an overcrowded market face a tough mission: finding the consumer at a profit...

Red-hot. That probably best describes the state of the telecom business in India. And it is visibly overwhelming too. Advertisements selling telecom offerings have sprung up in the unlikeliest of places. With telecom service providers clocking up Rs 1,50,000-crore in business - it is double the size of the FMCG industry - the excitement is palpable.

There are 12 players, slugging it out (both nationally and locally). And four more are waiting in the wings. What are they betting on? afaqs! tries to make sense of the clamour in the telecom jungle.



Good news – and bad

The growth of telecom has come mainly on the back of mobile telephony subscriptions, which are going up by around 10 per cent every quarter. In the first half of 2009-10, mobile phone operators (GSM and CDMA) added 80 million subscribers, taking the subscribers' base to 470 million.

The sobering fact is that the monthly ARPU (average revenue per user) for a telecom operator is declining. In the GSM category, ARPU went down by 10 per cent from Rs 205 in January-March 2009 to Rs 185 in April-June 2009, while in CDMA - where it was already low – ARPU declined by 7.2 per cent to Rs 92 in the same period. The industry has taken note of this. In fact, Sanjeev Agha, managing director, Idea Cellular went on record warning the industry of a sectoral bubble. But threat of bursting bubbles is not holding back those in the fray.

Of the 12 players in the field, two (Aircel and MTS) have gone national, two have launched or expanded their GSM services (Reliance Communication and Tata Teleservices), while a new bunch of four (Datacom from Videocon, UniNor – a JV between Unitech and Telenor, Etilsalat-Swan Telecom and the S Tel-Batelco JV) are readying themselves for the coming battle.

Aggressive advertising is the name of the game. Airtel, the biggest spender in this category, invests around Rs 950 crore (according to Spatial Access) in advertising, while Vodafone spends around Rs 750 crore. Even Idea - a comparatively smaller player - has a budget of Rs 400 crore. This means that even if the newer brands (seven, including the four who are set to jump in) spend around Rs 400 crore each, the category is expected to contribute around Rs 3,000 crore more. Besides, the existing players should increase their advertising and media budget by at least 10 per cent by next year to Rs 4,500-odd crore. As a result, advertising and media spend by telecom could touch Rs 7,500 crore, a lion's share of the total media and advertising spends in India.

What are they talking about?

When Aircel went national earlier this year, it launched a campaign highlighting advanced value added services – and was clearly aimed at high-end users. Surprisingly so, because mobile penetration was already very high in this segment, and new consumers were expected to come from the bottom of the pyramid.

Interestingly, the other brands which were launched - or expanded - subsequently also adopted a similar route, be it GSM service provider Tata Docomo or CDMA operator, MTS. The newer players refrained from talking about price in the initial phase of their communication beause they did not want to alienate any consumer segment. And speaking directly to the low-end would have alienated the higher-end consumers. Also, the brands believed that talking to the top-end would pull in consumers at the bottom of the pyramid. In fact, this strategy works especially well for the telecom sector, where a single brand caters to two extreme ends of the consumer base.

What these new players were also banking on was that the attrition rate in India is one of the highest in the world - around 30 per cent of users change operators every year. This is because India is predominately a pre-paid market (around 80-90 per cent), where the subscriber is may well change his service provider, every time he goes to local outlet to recharge his subscription.

Moreover, the trend of multiple SIM cards was fast catching up, thanks to the virtually zero cost of acquiring a new SIM. The consumer today prefers to use different SIM cards depending on his need. For instance, if a particular service provider offers cheap STD call rates at night, a subscriber might buy this service just for this. Even high-end consumers use multiple SIM cards or services, lured by the attractiveness of the scheme. For instance, a high-end consumer may use Airtel or Vodafone post paid service for voice, but for mobile internet connection, he might opt for a CDMA operator.





Value for money

MTS, the brand launched by Russian company Sistema and Shyam Telelinks, hopes to get 70 per cent of its revenue from voice calls. The rest will come from data and other value-added services (VAS). This is why, in its communication, it put the consumer at the centre with multiple hands representing an urban-centric consumer who takes up multi-tasking and has multiple needs.

Telecom players are desperately promoting VAS (it includes ringtones, caller tunes and SMS, among other things), which, in India, still don't contribute more than 15 per cent to a telecom operator's revenue. In comparison, China's mobile companies earn, on an average, about 29 per cent of their revenues from value-added services. In the Philippines, where women use Blackberry phones as chatting devices, that figure is as high as 40 per cent.

The present communication strategy of telecom players is also in anticipation of the future market conditions that might develop after number portability (the deadline for implementation of the first phase is December 31) is in place (the subscriber can change his service provider without surrendering his number). Many newer players expect the churn-out amongst post-paid customers to go up substantially. Besides, the introduction of 3G will open up new opportunities and services.



Blink and miss

MTS plans to set up 2,000 branded outlets across five circles so that the consumer can 'experience' the brand. Besides, the company is also banking on multi-brand shops in various localities keeping in mind the fact that if a customer has to travel a kilometre extra every month to get his cash card recharged, he might even change the service. Newer brands need a distribution network that matches any FMCG brand's.

That becomes imperative because it is almost impossible for a consumer to differentiate between operators, even in terms of services, packages and tariff plans. Brand imagery, brand perception and brand familiarity become the deciding factor. Admits Pradeep Shrivastava, CMO, Idea Cellular, "Though Idea is a familiar brand across the country, it still faced a huge challenge in the newer circles that it entered. So you can imagine the fate of new brands."

The newer players are doing everything to get maximum visibility through outdoors or innovative marketing. For instance, MTS, on the day of its launch in the capital, paid for the free passage of vehicles at the DND Toll Gate, Noida ensuring word of mouth publicity.

Meanwhile, the existing players are going strong on the message of reliability and trust. Theme-based advertising has become the order of the day, whether it is Airtel's conversation about its network of 110 million people or about Tata Indicom's push through 'Suno Dil Ki Awaaz'. Tata Teleservices (it offers both GSM and CDMA services) wants to position Tata Docomo as a 'young' and 'value-to-the-customer' brand, while Tata Teleservices caters to the growing data demand (CDMA players claim that their services are more suitable for data).

Talking about the peculiarity of advertising in this sector, K V Sridhar, national creative director, Leo Burnett, says, "When everyone talks about FMCG-isation of the telecom category in terms of the advertising patterns of the categories, the only similarity is that both FMCG and telecom have a wide range of products and services to offer under the main brand. But on the advertising front, they are the opposite! Telecom ads are more intuition-based, reacting and responding swiftly to market changes - in as little as a week. FMCG advertising is more of strategy-based which takes months to take shape after full-fledged research."

According to marketing heads of telecom service providers, television is the favourite medium (more than 50 per cent of the spend goes to TV) for telecom brands, especially those that have gone national. Brands that are strong in the southern or eastern region rely heavily on regional television. However, what's interesting is that a large chunk of the media spends of new players - almost 25 per cent of their media spending budget or Rs 700 crore - will go to OOH. This could be a crucial boost for the outdoor medium.

Digital media too finds a place in the mix as does in-store brand messaging, when it comes to converting a prospective consumer at the point-of-sale. In India, nothing sells like cricket. Telecom players seem to have picked up the lesson well enough, and very much in time. Purchasing properties and sponsorship rights for various events are on the cards for all top companies.



Ignore price at your peril

Though all new players began with communicating their technological advancements and enhanced services, talking about the price war or a more attractive package could not be avoided for long because the new consumers will have to come from semi-urban and rural areas. Some estimates declare that every second new consumer will come from this segment.

Price will be a plank telecom operators have to use for some time. "Tariffs will go down further. It's there in the local calls and STD calls as of now. You would probably see it further in ISD as well. That will keep happening till someone is able to differentiate in terms of their service offering," points out Romal Shetty, head of telecom, KPMG.

Tata Docomo, a GSM service provider, launched in April this year, introduced a per-second tariff plan instead of per-minute, though it did not communicate the same in the initial phase. It wasn't an untried tactic, but per-second pricing hadn't caught on in the past. Says Gurinder Singh Sandhu, head - marketing, Tata Docomo, "We refrained from communicating the scheme initially because we wanted the consumer to realise it himself." Soon others - old and new - were forced to adopt it, though it meant an estimated 20 per cent drop in voice revenue.

Pay-per-second became the biggest thing to hit the market after the lifetime validity plan for Rs 999 was introduced in 2005. What the industry pundits say is that the scheme became popular because of its transparency.

After Tata Docomo, Aircel launched the plan in Kolkata, while MTS followed suit in Delhi. State-owned BSNL also went for the per-second plan in Karnataka, while Aircel added Orissa. Idea, Vodafone, Reliance and Airtel then joined the gang. Others like Reliance pushed the price war further with one single tariff plan of 1 paisa per second irrespective of the location of the customer or the network he is talking to. Tata Docomo also introduced a pay-per-word SMS service.

Many industry practitioners believe that the players are scraping the bottom of the barrel for low-pricing options, which are not sustainable in the long run. They feel that supply is outstripping the demand and it is hurting business. With profit and loss figures of telecom service providers for 2008-09 showing revenues slowing down, what will happen when more competition enters?

"In the near future, some companies will have to merge or get acquired. The Indian telecom market cannot accommodate more than seven players," predicts Shetty of KPMG.

The older players in mobile telephony like to believe that the consumer does not want cheaper price. Instead, she wants uninterrupted, enhanced services for a competitive and reasonable price. For instance, a consumer in the metros wants no call drops even if she is in a basement or a lift.

Matching tariff plans and acquiring new customers looks like an achievable objective. But the biggest challenge for the new kids on the block will be to have their network in place, especially in rural and semi-urban areas. Providing seamless conversation without call drops in rural areas could cost several hundred crores and for some circles this could even go over Rs 1,000 crore, depending on the geographical spread. It includes spectrum cost, cost of setting up a customer service channel, telecom and IT infrastructure. Besides, setting up the network takes time.

Many believe that 12 to 14 players cannot exist - and sustain themselves - in one circle (in advanced markets, there are three or four). Despite all the questions and posers, telecom companies are living in interesting times.





This story is based on interviews with Gurinder Singh Sandhu, head-marketing, Tata Docomo, Kumar Ramanathan, CMO, Vodafone Essar, Leonid (Lenny) Musatov, CMO, MTS: Lloyd Mathias, CMO, Tata Teleservices, Pradeep Shrivastava, CMO, Idea Cellular, Sanjay Behl, group head - brand and marketing, Reliance Communications and Shireesh Joshi, director - marketing, Airtel.