Star Airways offered passengers air services within the country and served a territory of 18, 000 sq. miles with an expanding population of over 70 lakh of people who are potential users of the airline services
Star Airways offered passengers air services within the country and served a territory of 18, 000 sq. miles with an expanding population of over 70 lakh of people who are potential users of the airline services
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Consumer Behavior
Note :- Solve any 4 Case Study
All Case Carry equal Marks.
CASE I
Sunder Singh
Sunder Singh
had studied only up to high school. He was 32-years of age, lived alone in a
rented room, and worked eight-hour shift at one petrol pump, then went to the
other one for another eight-hour shift. He had a girl friend and was planning
to marry.
One
day when he returned from work, he got a note from his girl friend that she was
getting married to someone else and he need not bother her. This was a terrible
shock to Sunder Singh and he fell apart. He stopped going to work, spent
sleepless nights, and was very depressed. After a month, he was running Iowan
his savings and approached his earlier employers to get back his job, but they
would not give him a second chance. He had to quit his rented room, and sold
few things that he had. He would do some odd jobs at the railway station or the
bus terminal.
One
day, nearly two years ago, he was very hungry and did not have any money and
saw a young man selling newspapers. He asked him what he was selling and he
told him about Guzara (an independent, non-profit, independent newspaper sold
by the homeless, and economically disadvantaged men and women of this metro
city). Sunder Singh approached the office and started selling the newspaper. He
did not make a lot of money, but was good at saving it. He started saving money
for a warm jacket for next winter.
He
was reasonably happy; he had money to buy food, and no longer homeless and
shared a room with two others. One day, with his savings he bought a pair of
second-hand Nike shoes from flea market.
Sunder
Singh is not unique among low-income consumers, especially in large cities, in
wanting and buying Nike shoes. Some experts believe that low-income consumers
too want the same products and service that other consumers want.
The
working poor are forced to spend a disproportionate percent of their income on
food, housing, utilities, and healthcare. They solely rely on public
transportation, spend very little on entertainment of any kind, and have no
security of any kind. Their fight is mainly day-to-day survival.
QUESTIONS
1.
What
does the purchase of a product like Nike mean to Sunder Singh?
2.
What
does the story say about our society and the impact of marketing on consumer
behavior?
CASE
II
Key to Buyers'
Minds
Consumer
buying research has turned a new leaf in India. The era of demographics seems
to be on the backbench. Now, Marketing Research people are less likely to first
ask you about your age, income, and education etc. Instead, there is a distinct
shift towards inquiries about attitudes, interests, lifestyles, and behaviour -
in short towards a study of consumers' minds called psychographics.
Pathfinders,
the marketing research wing of Lintas, occasionally came out with its highly
respected "Study on Nation's Attitudes and Psychographics (P:SNAP). The
first in this series was released in 1987 with an objective to develop a
database of lifestyles and psychographics information on the modem Indian
women. The second was in 1993, and the third in 1998. Pathfinders choose woman
for the study because of the belief that more often than not, in urban areas,
it is the woman who makes buying decision.
The
Pathfinders' study involves interviewing over 10,000 women over the entire
country and segmenting them in clusters according to their beliefs, attitudes, lifestyles,
and lastly their demographics profile. The idea is to identify groups of
consumers with similar lifestyles who are likely to behave towards products or
services.
For
advertisers and advertising agencies, this profile helps enormously. For example,
an advertiser may want to give a westernised touch to a commercial. The profile
of the target customer, as revealed by this study, tells the advertising people
the perimeter within which she/he must stay, otherwise the ad may become an
exaggerated version of westernised India.
For
the purpose of this study, Pathfinders divided the Indian women in 8 distinct
cluster of varying values and lifestyles. Figures from two studies are
available publicly and are given below:
|
Cluster
|
1987
(%)
|
1993
(%)
|
|
Troubled
homebody
|
15.9
|
18.3
|
|
Tight-fisted
traditionalist
|
14.8
|
10.0
|
|
Contended
conservative
|
7.0
|
9.3
|
|
Archetypal
provider
|
13.0
|
8.8
|
|
Anxious
rebel
|
14.1
|
15.8
|
|
Contemporary
housewife
|
19.2
|
22.1
|
|
Gregarious
hedonist
|
8.7
|
6.6
|
|
Affluent
sophisticate
|
7.3
|
9.1
|
The
studies seek to track the macro level changes and movements within these 8
clusters in a period of time.
We
note from the table that in 1987, 8.7% of the women could be classified as
"gregarious hedonist" - those who consider their own pleasure to be
supreme in life. 'In 1993, this figure fell to 6.6%. The "troubled
homebody" segment - those with large families and low-income, increased
from 15.9% in 1987 to 18.3% in 1993.
Information,
such as this, is obviously useful to assess the collective mood. That's why
Pathfinders have an impressive list of clients fort heir P:SNAP, which includes
Hindustan Lever, Cadbury, Johnson and Johnson, and Gillette.
SOME
PSYCHOGRAPHICS PROFILES OF INDIAN WOMEN
Rama Devi, the
Contended Conservative
The lady lives
a 'good' life - she is a devoted wife, a dotting mother of two school-going
sons, and a God fearing housewife. She has been living her life by the
traditional values she cherishes - getting up at the crack of dawn, getting the
house cleaned up, having the breakfast of 'Aloo Parathas' ready in time before
the children's school-bus honks its horn, laying down the dress her 'government
servant' husband will put on after his bath, and doing her daily one-hour Puja.
She fasts every Monday for the welfare of her family, looks at the 'freely
mixing' and 'sexually liberal' youngsters with deep disdain and cannot
understand the modem young woman' s 19reed' for money, jewellery, and jobs.
Her
one abiding interest outside the household is the Ganesh Mandir that she has
visited every Wednesday, ever since she got married. She lacks higher education
and hence has little appreciation for the arts, the literature, and the
sciences. Her ample spare time is spent watching the TV, which is her prime
source of entertainment and information.
Shobha, the
Troubled Homebody
Shobha married
young to the first person she fell in love with, Prakash. Four children came
quickly before she was quite ready to raise a family. Now, she is unhappy. She
is having trouble in making ends meet on her husband's salary who is employed
as clerk in a private business and is often required to work up to late hours.
She is frustrated, as her desire for an idyllic life has turned sour. She could
not get education beyond high school and hence there are hardly any job
opportunities for her. Her husband also keeps on complaining of the long hours
of backbreaking work he has to put in. He consumes country-made liquor
routinely.
Shobha
finds escape in Black and White TV soap operas and films that transport her into
the world of her dreams. She watches TV almost all through the day and her
children roam around in the locality streets and cannot expect any help from
their' ever-grumbling' mother. Purchases are mostly limited to 'essentials' and
any discretionary purchases are postponed till it becomes possible.
Neeru, the
Archetypal Provider
Neeru
epitomises simplicity. Her life is untangled. It runs on a set timetable with
almost clockwork precision. She works as a primary school teacher in a rural
government school about 50 kilometers from her district town residence. She is
married to a social worker in an NGO whose income is erratic. Her three
children, two teenaged sons and l0-year old daughter are getting school
education.
The
day begins with the lady getting up before anybody else and finishing the
household chores as fast as she can. There is no room for delay as the State
government 'Express' bus, on which she ravels to her school will be at the bus
stop across the road precisely at 8.00 A.M. If she misses that, the next
ordinary bus comes at 11.15 A.M, quite useless as it will reach her school only
at 1.00 P.M. The school closes at 2.00 P.M. There are private Jeeps running
sporadically, but the fare is high and Neeru does not believe in wasting hard
earned money. Besides, she travels on husband's 'free pass'. Neeru prides
herself on her monthly savings ofRs.1000 for the last many years. The money
will go toward the wedding of her daughter.
Vandana, the
tight-fisted traditionalist
For Vandana,
saving money is 'in-born' discipline. When she was young and unmarried, she
remembers her mother was extremely tight-fisted and ran the household in under
Rs.800 per month. It was the necessity of those times as her father retired at
a princely salary of Rs.1800 per month. All through her childhood, she saw
deprivation and hardship. She would not join the annual class picnic in her
school days as it meant' avoidable expenditure'.
Now
she is married and mother of two school going children. The husband works in a
bank as a clerk. He has taken all the loans that he could from the bank and
invested the money in real estate. As a result of monthly deductions toward
repayment of loans, his take home salary is now very little. But Vandana can
manage. The school dresses are sewn by her at home, the stationary required
comes from a wholesale market, and the books are second-hand from 'friends',
cultivated for the purpose. On birthdays, Vandana prepares a sweet dish at home
and they spend on a film. There is a cow and calf at home, being kept as a
source of revenue and milk. She sells half the milk to a neighbour and the
family consumes the rest. Life in general is hard and frugal. There is a colour
TV at home, but they disconnected the cable connection ever since the rates
went up. Now they watch Doordarshan only.
Aditi, the
Anxious Rebel
Daughter of a
Freedom Fighter, Aditi has always fought her values and principles.
People still
remember when she walked out of the exam half in a huff as a mark of protest
against mass cheating' sanctioned' by the centre superintendent in a tough
paper. While every body else passed with high marks, Aditi failed.
Even
though she repeated the paper, Aditi never learned to swim along the flow. She
always swam against the current. She joined the Communist Party in her college
and gave rousing speeches against the teachers and authorities. This resulted
in her getting very poor marks and left her jobless.
Later,
Aditi joined an NGO and now works on social issues. She says she is a creature
of the mind, not materialism. Her favourite dress is a long flowing Kurta, and
slacks. She wears loosened hair and chappals. She reads voraciously.
Financially, she is independent and lives with her parents. Her disdain for the
institution of marriage and contempt for the modern Indian male keep her single
and unattached. She will continue-to be so as she prefers this status, but may
adopt a baby later in life.
Reema, the
Gregarious Hedonist
Just 19, and
Reema is already divorced. Her father is a wealthy businessman. During Reema's
childhood, her father was mostly away in Dubai and Africa, trying to amass a
fortune. That he did but he lost on his chance to be a good father. Both his
children started feeling like' orphans' after their mother got involved with
another man.
Reema
was ever longing for her family when alone came Harsh, her private high school
tuition teacher. Harsh was all of 22 and very caring. He was tall, handsome,
and very popular in school and many girls had a crush on him. Reema was sixteen
then and a great fan of Harsh. For her, Harsh was a prize catch as he combined
the loving qualities of a father with a mix of being a good teacher. She was
soon dazzled and surrendered in a physical relationship.
Marriage
followed. She never understood how Harsh changed overnight from a caring father
figure to a demanding husband. And she could never cope with the six hours she
had to spend in the kitchen everyday. Why should she do the cooking, she asked
Harsh, as it was something that the 'Ayas' did? The reality of a humdrum
middle-class existence hit her hard and she soon walked out of 'the hell'.
Her
father understood her need to recover and made her allowance rather generous.
He bought her a Red Sports Car and got her an admission in a private college.
College
is entertainment for her. She attends college only on days when there is some
function like a cultural evening or the sports meet. Now, Reema spends on
alcohol, dresses, parties, and holidays. She consumes a mood elevating drug
every evening and keeps sending SMS messages on her mobile to her friends all
through the night. For her, life means 'buying pleasure endlessly'.
Shruti, the
Contemporary Housewife
Shruti is an
urbane woman. She is well educated and genteel. She is an officer in a national
bank, and active in her club affairs and community activities. Socialising is
an important part of her life. She is a doer, interested in watching cricket,
politics, and current affairs. Her life is hectic as she has a lot to do for
home and office everyday. Still she often enjoys viewing movies on TV every
week.
Shruti
shops for Sarees, jewellery, and cosmetics for herself on a regular basis.
However, family needs come before her own needs. Her home is a double income
household and she has one kid. All the modern gadgets are present and the
standard of living is upper middle-class.
Momeeta, the
Affluent Sophisticate
Momeeta was
born Mamta, but elevated herself to Momeeta after marriage to a business
tycoon. Momeeta is an elegant woman with style. She lives in Mumbai because
that is where she wants to be. She likes the economic and social aspects of big
city living and takes advantage of her' contacts'. She has built up friendship
and cultivated the city bigwigs by inviting them to the numerous parties she
throws in her luxurious penthouse.
Momeeta
is a self-confident, on-the-go woman, and not a homebody. She is fashion
conscious and clothes herself in the latest designer dresses. Even at 40, she
can carry off a mini with aplomb. She is financial very secure and hence does
not shop with care. She shops for quality, exclusivity, and the brand name, not
the price. She frequently travels abroad, buys expensive gifts for friends, and
has an international understanding on what is "chic" at the moment.
Three
psychographics profiles of Indian women and their food shopping habits:
|
Type I
|
Type II
|
Type
III
|
|
Money
conscious
|
Careful
shopper
|
Gourmet/satisfaction
|
|
Food
shopping is done on necessity and is
postponed as long as possible.
|
Makes
out shopping lists and makes weekly/ monthly purchases.
|
General
liking for food shopping and food related activities.
|
|
Minimum
amount of money spent. This is enabled through comparative evaluation of many
shops, even if it takes more time.
|
Can
purchase larger quantities if there is an incentive like lower prices or a
gift scheme. Food budget is flexible.
|
Collects
and files food recipes. Experiments with new food products and methods of
cooking. Likes to exhibit her culinary skills to her friends and family.
|
|
Operates
within the food budget. Does not buy larger quantities to save money.
|
Checks
labelling for price, nutrition and expiry date information
|
Spends
a lot of time in kitchen as preparing food is an enjoyable activity.
|
|
Price
and immediate outflow of cash is the dominant purchase concern.
|
Goes
for tried and trusted brands even if they cost a little more. This is an
important purchase concern.
|
Food
items are bought either based on the past satisfaction from them or for their
novelty value. Unknown food items are purchased if they excite the senses.
This is the dominant purchase concern.
|
|
Who
fits in where?
Shobha,
Neeru, and Vandana,
|
Shruti,
Aditi, and
Rama
Devi
|
Momeeta
(she is a food lover).
|
(Prof Deepak Khanna, colleague, has developed these profiles based on
his perceptions of certain personality types).
 |
| Star Airways offered passengers air services within the country and served a territory of 18, 000 sq. miles with an expanding population of over 70 lakh of people who are potential users of the airline services |
QUESTIONS
1.
Explain
how the above-mentioned information is likely to benefit a marketer?
2.
Which
of the above mentioned types are likely to respond to sales promotion? Explain.
3.
A
manufacturer of personal care products in the premium segment starts frequent
sales promotions. What is likely to be the impact on the above-mentioned types?
Case III
Star Airways
Star Airways offered passengers air services within the country and served
a territory of 18, 000 sq. miles with an expanding population of over 70 lakh
of people who are potential users of the airline services. The geographic
diversity and scattered business and commercial cities have led to steady
increase in the number of people who use air travel. The clientele includes
business people, as well as individuals on non-business trips, holidays, and
leisure trips etc. As a result, the passenger traffic had been increasing
steadily since the firm started operations in 1983. In the last three years,
however, the growth has not been consistent with the growth pattern showed by
the company in the last fifteen years - as against a healthy growth of 13 per
cent, the sales have marginally improved, registering a growth of 6 per cent.
The company's early success was due to the pioneering
concepts used by it in the airline industry, which was dominated by large
private and government operators with little market orientation. The launch of
the company's services coincided with a boom in the aviation sector and reduced
government dominance, which opened up the skies for private operators. Besides
this, the company offered a host of innovations in the customer service functions
such as smaller and newer planes, convenient schedules, free gifts, comfortable
seats, exclusive terminals, express baggage-check, and airport-to hotel transit
for its first and business class clients. In turn the fares charged by the
company were premium in the category and almost 15 per cent higher than the
industry average. The company president in the following words justified this
move: ''We are selling entirely on the basis of providing quality experience to
our clients. Our services, ambience, and commitment to safety and time-bound
schedule, all surpass the standards of the industry."
During the first ten years of operations the company
faced no direct competition. The only problems faced by the marketing staff
were (a) the price, (2) the need to convince clients that air service was more
efficient than other alternatives, (c) identifying the customers, and more
importantly (d) developing the image of a dependable service. The consumers,
who till now were forced to put up indifferent service offered by large
government operators, did not offer much resistance and were agreeable to try
out new company. Once customers were convinced, retaining them was very easy.
Hence the company enjoyed immense loyalty from its clients with almost 40 per
cent of them being regular users. Sales were handled by the sales division as
well as by some independent sales representatives.
In early 1990s the company faced direct competition for
the first time with a new company coming up with smaller planes and all other
advantages which were previously associated with Star Airways. The growing
business had made the market very lucrative and hence in the next three years,
four major competitors were also vying for the market share. The company slowly
lost to these competitors and could manage to retain only 30 per cent of market
share by the end of 1994. All the competitors were engaged in aggressive
promotion and soon started a 'price war' in order to outdo one another. For the
next six months, each of them offered big discounts and gifts (such as TV /
audio systems) with the return ticket on different routes. The most profitable
and commercia1ly viable routes were the major targets of these price related
competitions. The consumer was the ultimate beneficiary and in short time, the
companies started facing losses due to this price-cutting.
Star Airways had
so far remained out of this ‘price-war’ and lost its market share on the
competitive routes very rapidly. It was
able to retain the clients on other routes, which were not a part of this
intense competition. Unhappy an anxious
about this state of affairs, the company vice president, marketing, developed a
marketing plan with several components.
The initial part of the plan consisted of a market research done on a
cross-section of existing clients as well as the clients of competitors and the
following observations were made :
·
Star Airways was considered a quality-oriented company
but many felt that it was getting stodgy.
·
The satisfaction with crew and schedules had declined
over the last 5 years amongst regular customers.
·
The clients felt that the airline was losing its edge
over customer service because it was nonflexible.
·
The prices offered by competitors are less and they
provide only a fraction of services offered by Star Airways. This was the main
reason of clients switching over to competitors. As many as 70 per cent
respondents considered the costs as the most important factor in deciding on
the airline.
·
Some deciding factors and their relative importance to
clients were found to be following this pattern.
|
Feature offered by airline
|
Importance of feature as the deciding
factor
|
Rank of feature in decision making
influence
|
|
Price
|
67%
|
1
|
|
Ambience and food
|
9%
|
3
|
|
Punctuality
|
14%
|
2
|
|
Services & convenience
|
7%
|
4
|
|
Free gifts etc.
|
3%
|
5
|
The second phase of the plan included a massive
advertising and promotion plan. The VP marketing, Anil Saxena, felt that the
company needed to advertise it's dedication to quality and rebuild an image of
being a customer-oriented airline. He began discussions with the advertising
agency to launch a campaign in the near future.
After a month, the agency came out with the following
recommendations:
·
The campaign is to be completed in four months time and
the budget will be 351akh.
·
The company would reach 85% of target audience, once in a
month by direct mail.
·
Four times a month a TV commercial will be aired on a
business show time. The audience TRP is consistent and highest in this category
of shows.
·
Star Airways would build the campaign theme around
'quality and customer service initiatives' .
·
The direct mail letter would be sent to a database of
85,000 clients in four months. The letter will contain information on the
airline and again stress on the same theme of' quality and customer service'.
QUESTIONS
1.
What is likely to be the decision process in case of
choosing an airline?
2.
Would this plan suggested by the vice president help in
convincing the customers to use Star Airways? Give your reasons.
Case
IV
Mouse-Rid
One hot May
morning, Shobha, general manager of Innotrap India Ltd., entered her office in
Delhi. She paused for a moment to contemplate the quote, which she had framed
and hung on a wall facing her table.
"If
a man can make a better mousetrap than his neighbour, the world will make a
beaten path to his door." She vaguely recalled that probably it was Ralph
Waldo Emerson who said this. Perhaps, she wondered, Emerson knew something that
she didn't. She had the better mousetrap - Mouse-Rid - but the world didn't
seem all that excited about it.
Shobha
had just returned from a Trade Fair in Kolkata. Standing in the trade show
display booth for long hours and answering the same questions hundreds of times
had been tiring. Yet, this show had excited her. The Trade Fair officials held
a contest to select the best new product introduced at the show. Of the more
than 150 new products, her mousetrap had won first place. Two women's magazines
had written small articles about this innovative mousetrap, however, the
expected demand for the trap had not materialised. Shobha hoped that this award
might stimulate increased interest and sales.
A
group of investors who had obtained rights to market this innovative mousetrap
in India had formed Innotrap India in January 2001. In return for marketing
rights, the group agreed to pay the inventor and patent holder, a retired
engineer, a royalty fee for each trap sold. The group then appointed Shobha as
the general manager to develop and manage Innotrap India Ltd.
The
Mouse-Rid, a simple yet clever device, is
manufactured by a plastics firm under contract with Innotrap India Ltd.
It consists of a square, plastic tube measuring about 6 inches long and one and
one-half inches- square. The tube bends in the middle at a 30-degree angle, so
that when the front part of the tube rests on a flat surface, the other end is elevated. The elevated end holds a
removable cap into which the user places bait (piece of bread, or some other
titbit). A hinged door is attached
to the front endofthe tube. When the trap is "open", this door rests on two narrow
"stills" attached to the two bottom corners of the door.
The
trap works with simple efficiency. A mouse, smelling the bait enters the tube
through the open end. As it moves up the angled bottom toward the bait, its
weight makes the elevated end of the trap drop downward. This elevates the open
end, allowing the hinged door to swing closed, trapping the mouse. Small teeth
on the ends of stills catch in a groove on the bottom of the trap, locking the
door closed. The mouse can be disposed of live, or it can be left alone for a
few hours to suffocate in the trap.
Shobha
felt the trap had many advantages for the consumer when compared with
traditional spring-loaded traps or poisons. Consumers can use it safely and
easily with no risk for catching their fingers while loading. It poses no
injury or poisoning threat to children or pets.
Shobha's
personal and informal inquiries with acquaintances and friends suggested that
women are the best target market for the Mouse-Rid. Most women stay at home and
take care of household chores and their children. Thus, they want a means of
dealing with the mouse problem that avoids any kind of risks. To reach this
market,
Shobha
decided to distribute Mouse-Rid through grocery stores, and kitchenware stores.
She personally contacted a supermarket and some departmental stores to persuade
them to carry the product, but they refused saying that they did not sell such
contraptions. She avoided any wholesalers and other middlemen.
The
traps were packaged in a simple cardboard, with a suggested retail price
ofRs.150 for a piece. Although this price made Mouse-Rid about five 1;0 six
times more expensive than standard traps, those who bought it showed little
price resistance.
To
promote the product, Shobha had budgeted approximately Rs. 300,000 toward
advertising in different women's magazines, such as Grah Shobha, and Good
Housekeeping. Shobha was the company's only salesperson, but planed to employ
sales people soon.
Shobha
had forecasted Mouse-Rid's first year sales at 2 million units. Through Aril,
however, the company had sold only few thousand units. She wondered if most new
products got to such slow start, or if she was doing something wrong.
Shobha
knew that the investor group believed that Innotrap India Ltd. had a
"once-in-a lifetime chance" with its innovative mousetrap. She
sensed the group's impatience. To keep the investors happy, the company needed
to sell enough traps to cover costs and make a profit.
QUESTIONS
1.
Has
Shobha identified the best target market for Mouse-Rid? Why or why not?
2.
Does
Shobha have enough needed data on consumer behaviour? What type of consumer
research should Shobha conduct?
3.
What
type of advertising can influence consumers for this type of product?
Case
V
Golden Glow Soap
Anil Mahajan
absent -mindedly ran his finger over the cake of soap before him. He traced the
name 'Golden Glow' embossed on the soap as he inhaled its unmistakable sesame
fragrance. It was a small soap, almost like a bar of gold. There were no
frills, no coloured packaging, and no fancy shape. Just a golden glow and the
fragrance of sesame and Lucida font that quietly stated' Golden Glow'.
Mahajan
smiled wanly and clasped the soap in his hands, as if protecting it from an
unseen predator. He was wondering with quiet concern if the 30-year-old brand
would last long. Sensi India, where Mahajan was marketing manager, was taking a
long, hard look at the soap, as it was proving to be a strain on resources.
There
were varying stories about how Golden Glow was launched. Some said the brand
was a 'gift' from the departing English parent company. Others claimed that it
was created for the then chairman's British wife, as the Indian climate did not
agree with her skin. They also claimed that the lady also coined the copy
"The honest soap that loves your skin" was also coined by the lady.
The line had stuck through three decades. Only the visuals had changed, with
newer models replacing the older ones.
Zeni was
basically a speciality products company producing household hygiene, fabricare,
and dental care products. Golden Glow was the only soap in its product mix,
produced and marketed by Sensi. Its reliable quality and value delivery had
earned it a lot of respect in the market. Golden Glow equity was such that
Sensi was known as the Golden Glow Company. Indeed, the brand name Golden Glow
denoted purity, reliability, and gentle skincare.
In
1994, Sensi UK increased its stake in the Indian subsidiary to 51%. Within
months, all of Sensi's products were given a facelift, thanks to the inflow of
foreign capital. New packaging, new fragrances, new formulations and more
variants were introduced.
Only
Golden Glow was left untouched. For, although it had a growing skincare
business following some strategic acquisitions in Europe in the early eighties,
Sensi UK was not a soap company. The UK marketing team ran an audit of every
brand and product in the company's portfolio. But when it came to Golden Glow,
it faltered. "We don't know this one," officials at the parent
company said.
"We
don't want this one to be touched," Mahajan had said protectively, a
sentiment tliat was endorsed by the managing director, Rajan Sharma.
"Golden Glow is too sacred, we will leave it as it is," he said.
But
the UK marketing team was confounded. What was a lone soap doing in the midst
of toilet cleaners and fabric protectors; they wondered, however they somehow
agreed that their proposed revamp strategy would only look at up-gradation, not
tinkering with what wasn't broken.
Indeed,
for 30 long years no one had tampered with the Golden Glow brand. And Mahajan
felt there was no reason to start now. Golden Glow, in his view, was a
self-sustaining brand. That was a bit of an understatement because advertising
for the brand was moderate and Sensi India had never used any promotional
gimmick for it.
Now,
after four years of nurturing the other categories, Sensi UK had decided to
launch its Vio range of skincare products in India. But Golden Glow's presence
and profile was a major roadblock to Vio's success. "It will create
dissonance, confuse our skincare equity and deter the articulation of Vio's
credo. It will stand out as a genetic flaw," argued the UK marketing head.
"You need to do a rethink on Golden Glow."
Mahajan
protested. "Why? It has such a strong equity and loyal following. So much
has been invested in it all these years. Why give up all that?"
Rajan,
however, had another idea. "Let us then extend the Golden Glow
brand." He said It was the simplest solution. Companies were now investing
heavily in creating new equities for their brands. But in Golden Glow's case,
Sensi was already sitting on a brand with a terrific equity. He felt that
extending this equity to other categories, such as skincare products would be
successful.
But
Golden Glow needed a new positioning before it could be extended. Till a few
years ago, it had been in premium category, priced at Rs.15. Then new brands
with specific positioning and higher price tags entered the market. This
created a level above Rs.15 soaps and pushed Golden Glow down to the mid-priced
range. So Golden Glow's price was not commensurate with its premium position
and image.
Over
the years, Golden Glow had become so sacred that Sensi India had been too
scared to do anything to it. As a result, the soap was left with niche category
of loyal users. This category neither shrank or increased, just kept getting
older and older, and with it the brand also kept growing older. For example,
when Mahajan's wife had her first baby at 25, her mother had recommended Golden
Glow for her dry skin and also for baby's tender skin because it contained
sesame oil. That was in 1979. Today, Mahajan's daughter had turned 21 and was
being wooed by Dove, Camay, even Santoor, and Lifebuoy Gold, with their
aggressive advertising. Golden Glow had begun to lose its image of being
contemporary as newer brands came in with newer values.
Today,
at 46, Mahajan's wife still used Golden Glow, but when she recommended Golden
Glow to her daughter, she said, "But Golden Glow is a soap for mothers,
for older people."
That
was a major problem. The Golden Glow brand had aged, and Sensi India hadn't
even been aware of it. While its equity had grown with its users, its personality
had aged considerably in the last 30 years. "I don't think you can keep
the personality young, unless you keep renewing the brand. The objective now is
to widen your equity so that your image becomes young," continued Rajan.
"For instance, if today you were to personify a Golden Glow user now, it
would be a woman of 45 years using the same brand for many years, who is
aver-se to experimenting, very skincare conscious, very trusting, and very
one-dimensional. As you can see, this is not a very competitive personality.
These are the strengths of our Golden Glow, but these are also its
weaknesses," he analysed.
The
context had changed. Today, youth demanded brands that stood for freedom and
fearlessness. They demanded bold brands that dared to cure, not just p;eserve.
"Preservation is for old people. Those are the attributes being presented
in evolved markets," said Rajan. To make Golden Glow contemporary, the
attributes had to be re-framed, he felt. "You can't make a young brand
trusting caring, loving, without adding other attributes to it. Today, youth
stands for freedom, for laughter, for frankness, for forthrightness. That's
what Close Up, Lifebuoy Gold, Vatika, and other brands propagate. So, either
come clean and say it is for older skin which needs trust and kindness, or
reposition the brand," said Rajan.
Repositioning
was also necessary to address another anomaly in Golden Glow's image: its
perceived premium. Sensi India had been unable to do anything about Golden Glow
slipping into the mid-price range following the entry of more expensive brands.
Now, as Rajan mulled over the brand extension plan, Mahajan felt that Golden
Glow's premium positioning was its core equity and that had to be maintained.
"If
you are premium priced in the consumer's mind, your extensions are
automatically perceived as premium. So, if you don't present the other products
as premium, the consumer will not see them as extensions of the brand," he
said. "For example, if you are to launch a shampoo which is priced lower
than Sunsilk, but higher than Nyle and Ayur, then whatever the rationale, the
consumer will not accept your product. "It is not the Golden Glow I
know," will be the feeling," he said.
Mahajan
felt that since premium positioning was one of Golden Glow's equity values, it
would be very difficult to convince consumers that the brand was being extended
without hanging on to this particular value. "Will they buy your rationale
that the very same values and equity would now be available at a low price? To
be in the premium segment now, you have to price it at Rs 35 or 40, almost on a
par with Dove," he said. "With Dove retailing at Rs 45, Golden Glow
will be perceived as a cheaper option."
"We
can't simply raise the price," said Rajan. "What are we offering for
that increase? You can 't add value because you don't want to tamper with the
brand. The consumers will then ask, "Golden Glow used to be so cheap, what
has happened now? The user will forget that 15 years ago, Rsl0 was expensive,
because all her comparisons would be in today' s context," said Rajan.
"So
what's the option?" asked Mahajan. "You don't have to be expensive to
be premium," said Rajan. Golden Glow already has the image of a premium
brand, thanks to its time-tested core values of purity, credibility, and
reliability. What we can do is reinforce the premium through communication and
positioning. In fact) we should have tinkered with Golden Glow long ago. That
is what HLL did with Lux. It also launched a bridge brand, Lux International,
in the premium category," said Rajan.
"How
could we have done anything to the brand?" asked Mahajan. "The
product had such a strong following. It stood for gold, for sesame oil, for its
subtle earthy perfume. We changed the packaging periodically, but that's all we
could do. Remember the time we brought out a transparent green Golden Glow with
the fragrance of lime? It bombed in the market."
Rajan
was not in favour of the premium positioning. It appeared very short sighted to
him, given the bigger plan to extend the brand. "Where are the volumes in
the premium segment? He asked. "For some reason, every manufacturer feels
that skincare can be an indulgence of only the moneyed class. As a result,
there is a crowd in the premium end of the market. Do we want to be yet another
player in the segment?"
Fifteen
years ago, Golden Glow was perceived as a premium product. But today,
globa1brands like Revlon, Coty, and Oriflame were delivering specific premium
platforms. Golden Glow did not have a global equity. 'Let us revisit the brand
and examine what it stood for 15 years ago and examine the relevance of those
attributes in today's context," suggested Rajan. "Golden Glow stood
for care, consciousness, love, quality and all that. But today, are these
enough to justify a premium position?" he asked Mahajan. "These
attributes are viable in the mid-priced segment." He said.
"The
mid-priced brand is the proverbial washer-man's dog," said Mahajan.
"You don't know whether you are at the bottom end of the premium range or
at the top-end of the low-priced range. You end up creating an image of being
on the opportunity fence. It is a mere pricing ploy, with no strategic
value."
QUESTIONS
1.
Discuss
the nature of problem(s) in this case?
2.
Suggest
the kind of consumer research needed?
3.
How
should Golden Glow be positioned/ repositioned to bring about the desired
change among consumers? Give your reasons.
CASE VI
Impact of Retail Promotions on Consumers
Shoppers' Delight, a large retail store, had above-average quality and
competitive prices. It advertised its retail promotions in local newspapers.
Its TV advertising was mainly aimed at building store image and did not address
retail promotions. The management knew it well that they had to advertise their
retail promotions more, but they did not feel comfortable with the
effectiveness of present efforts and wanted to better understand the impact of
their present promotions.
To better understand the effectiveness of present
efforts, a study of advertising exposure, interpretation, and purchases was
undertaken. Researchers conducted 50 in-depth interviews with customers of the
store's target market to determine the appropriate product mix, price, ad copy
and media for the test. In addition, the store's image and that of its two competitors
were measured.
Based on the research findings, different product lines
that would appeal to the target customers were selected. The retail promotion
was run for a full week. Full-page advertisements were released each day in the
two local Hindi newspapers, and also in one English newspaper that devotes six
pages to the coverage of the state.
Each evening, a sample of 100 target market customers
were interviewed by telephone as follows:
1.
Target customers were asked if they had read the
newspaper that day. This was done to determine their exposure to advertisement.
2.
After a general description of the product lines, the
respondents were asked to recall any related retail advertisements they had
seen or read.
3, If the respondents were able to recall,
they were asked to describe the ad, the promoted products, sale prices, and the
name of the sponsoring store.
4.
If the respondents were accurate in their ad
interpretation, they were asked to express their intentions to purchase.
5.
Respondents were also asked for suggestions to be
incorporated in future promotions targeted at this consumer segment.
Immediately after the close of promotion, 500 target
market customers were surveyed to determine what percentage of the target
market actually purchased the promoted products. It also determined which
sources of information influenced them in their decision to purchase and the
amount of their purchase.
Results of the study showed that ad exposure was 75 per
cent and ad awareness level was 68 per cent and was considered as high. Only 43
percent respondents exposed to and aware of the ad copy could accurately recall
important details, such as the name of the store promoting the retail sale.
Just 43 per cent correct interpretation was considered as low. Of those who
could accurately interpret the ad copy,
32 per cent said they intended to respond by purchasing the advertised·
products ' and 68per cent sad they had no intention to buy. This yields an
overall intention to buy of 7 per cent. The largest area of lost opportunity
was due to those who did not accurately interpret the ad copy.
The post-promotion survey indicated that only 4.2 per
cent of the target market customers made purchases of the promoted products
during the promotion period. In terms of how the buyers learned of the
promotion, 46 per cent mentioned newspaper A (Hindi), 27 per cent newspaper B
(Hindi), 8 per cent newspaper (English), and 15 per cent learned about sale
through word-of mouth communication.
The retail promotion was judged as successful in many
ways, besides yielding sales worth
Rs 900,000. However, management was concerned about not
achieving a higher level of ad comprehension, missing a significant sales
opportunity: It was believed that a better ad would have at least 75 per cent
correct comprehension among those aware of the ad. This in turn would almost
double sales without any additional cost.
QUESTIONS
1.
Why would some consumers have high-involvement levels in
learning about this sales promotion?
2 Is a
level of 75 per cent comprehension realistic among those who become aware of an
ad? Why or why not?
3. Do you
think such promotions are likely to influence the quality image of the retail
store? Explain.
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