The Hindu Business Line : Cutting through festival clutter

It's festival time again and companies and stores are coming out with various schemes for consumer durables. Even otherwise, going by personal experience, it is very confusing to see so many similar products, appreciate the differences between each brand and make a decision. I am sure people at this stage decide on a certain brand based on just one or two factors, such as price and its relevance to their needs, the special/exclusive features notwithstanding. How can marketers make sure their brand doesn't get drowned in the babel or is the one chosen by tired and shopping-weary customers?

-Ravi Kiran, on e-mail

THE rationale for launching consumer schemes, during festivities or otherwise, is really to pour new life into a brand. This is achieved through making the brand accessible or attractive to new customers or increasing the brand penetration through new products amongst the existing customer base.

However, in reality, what is happening is that ill-planned and misdirected consumer schemes are often really killing the brand values. They are actually working against all the investments made towards building the value proposition for the brand and thereby initiating purchase purely on account of a price-led benefit.

If I understand your question correctly, your concern really seems to be `how can a brand continue to offer its consumers a reason for brand preference in a relatively non-differentiated product category like consumer durables in a period when all brands are offering similar consumer schemes and promotions?'

Image and sales in the marketing mix

To answer your question, it is important to understand the complementary roles of image-building and sales-building measures within a brand's marketing mix. Image-building efforts are generally long-term and aim to build unique and motivating reasons for brand preference. Sales boosting measures are short-term and aimed at initiating trail or repurchase. However, the two activities should not be treated as mutually exclusive.

In fact, an effective sales promotion strategy should typically be preceded by an image-building campaign that builds on the functional, rational and emotional benefits of the brand. Consumers are then inclined to purchase the brand. Price may be the only deterrent to the purchase decision. If this image-building exercise is followed by effective sales promotions, which offer consumers a `bargain' on a desired brand, it has a greater possibility of being successful.

Some brands have also successfully managed to link the consumer scheme or promotion to the brand benefit itself, thereby building both image and sales at the same time. A recent American Express card offer during the current Diwali season is one such example. Amex cards launched a special promotion at a popular high-end market place in South Delhi, where the card offers discounts in most of the shops on Amex cards. The offer gives consumers a price benefit while also establishing the fact that the card is widely accepted in most establishments in the market.

Consumer schemes can be of various types:

1. A purchase with a purchase

2. A gift with a purchase

3. A discount coupon on next purchase

4. A time-bound price-off

5. A contest or sweepstake

Don't lose focus of the target customer

Whatever the type of scheme being planned it is important for a successful promotion to keep in mind the following: Is the promotion directed towards my desired target customer? In their attempts to increase sales, brands often lose focus of whom their desired target customer is, thus, either selling a lower price product to a customer, who would have purchased the brand at its actual value itself, or selling the brand to a customer who will never be a loyal customer of the brand. In the last decade, many well-established TV brands have eroded their brand value by selling the brand on a price-off to the non-target consumer, thus lowering the brand image and relevance to their existing target consumer. The threat of eroding the existing customer base is all the more relevant in the case of high value consumer durables. In such categories, a brand's badge values play a large role in influencing the consumer's purchase and consistent price-offs actually erode this value. The brand thus becomes undesirable to its existing customer base, which graduates to higher priced brands.

Is the promo a good fit?

The second key factor to be kept in mind is `Is the brand promotion in line with the brand image and brand benefits?' Many brands have eroded long-term brand values through co-promotions with products and services that do not strengthen and, in fact, actually dilute the brand image. To provide an illustrative example, if LG is today selling its durables on a health platform, the kind of cross-promotion schemes offered with other products or services should ideally offer similar health benefits. A free eye check-up with every LG Golden Eye TV would be one such example.

Time is important

The third factor to be kept in mind is `Does the timing and duration of the promotion maximise its effectiveness?' No promotion, no matter how successful, should be continued endlessly, as it will certainly erode the value of the brand. A lesson learnt the hard way by many toothbrush brands, which have been offering toothbrushes as a free product along with toothpastes for years, and are today faced with the problem of getting consumers to pay for the product.

As regarding the timing of the promotion, this brings me to one of your points on high clutter during festival time. There are both advantages and disadvantages of launching promotions during the festival season. You are right when you say this results in chaos in the market place with the brand that shouts the loudest winning. However, the market reality is also that this is the time of the year when consumers' propensity to spend is high and pockets are generally jingling with cash. I would like to add a note of caution here, in that these factors do not necessarily result in a higher inclination to purchase just about any and every product category. For example, offering a 20 per cent discount of contact lenses during the festival season need not really translate to higher sales for the brand during this period. In product categories where consumers do have a higher inclination to purchase during the festival season, such as consumer durables, the rules are different for the large and small players.

For a large brand that has designed an effective scheme and has the money power to shout the loudest, festival time cannot be ignored. However, for smaller brands, an effort to launch a comparative scheme could be quite counter-productive. One way of combating the crowd is through the extent of innovativeness and the relevance of the benefit offered. Another is to launch the scheme, maybe two months later when the clutter levels are lower. For example, during the New Year or Baisakhi season.

In the final analysis, it is important to remember that consumer schemes are launched to induce either trial or repurchase and this will only happen if the benefits of the brand are built as relevant and motivating to the consumer at that point of time. As they say, you can take a horse to the water but you can't make him drink unless he's actually thirsty!

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