LOCK, STOCK, CLICK AND BUY

eBay made its India foray with the takeover of 5 year old bazee.com in 2005 and has since then relied largely on multimedia advertising on the internet. However, this is the first time that this net giant is charting a completely new route through virgin waters. According to Mohamed Rizwan, Senior Creative Director, Wieden+Kennedy, a part of the creative team that worked on the campaign, “The brief was to promote eBay as a shopping destination where you get a wide range of top quality products, great deals and the ease of paying safely through a credit card. The ads communicate this in a funny, over-the-top manner in the form of a DD-esque call-in show ‘The eBay Way’ where callers are told the benefits of shopping on eBay, regardless of their problems.” However, cracking the Indian consumer conundrum won’t be easy. There are a plethora of factors that compound the complexity so evident in a rapidly transitioning Indian consumer space. Firstly, Indians are the best bargainers in the market and getting the best deals on the internet without having a chance to bargain face to face especially for used items might seem deterring to prospective buyers. Secondly, with regards to goods, Indians almost always, ‘touch’ and ‘feel’ and then buy. Though attitudes are changing, it will take a lot of time before consumers can buy high involvement products like mobiles, laptops and household appliances on eBay. As K. J. Singh, co-founder and CEO, Evolve Brands says, “For start, it should get offline as well and should have some availability in the malls where the customers go for shopping. Most of its target segment which is online also shops offline and needs to get a mindshare when offline and therefore the branding in the cluttered market is important also in case there are some offers which could be informed offline and executed offline.”

The third factor critical to the fortunes of eBay will be the variety of choices in the deals it provides to the customers. But on this, Muralikrishan B, Director, Marketing & Product, eBay India, asserts, “One of eBay India’s key advantages is the wide variety of products available – ranging from mobiles to necklaces, digital cameras to salwar kameez, diamond rings to laptops etc. The audience that comes onsite appreciates the variety and we are seeing good traction across categories as a result of this campaign.” Finally, online transactions are still perceived as a fodder for fraud by many Indians and it won’t be easy to break the taboo. Despite the fact that the campaign itself highlights the safety feature in its punch line, the starting point for the company would be to attract more and more hits to the website and slowly create the buzz through more outdoor events, follow-up TVCs and offering attractive pricing for different product categories.

However, leading brand analysts in the country do not seem to be resonating to the company’s tunes. While some have labelled the presence of Dr. Puri and Komal Singh as the uncle and aunty just pushing people to eBay, others are more sceptical of the campaign’s ability to eventually lead the visitor to actually buy from just being a casual visitor. Leading brand analyst Harish Bijoor, CEO, Harish Bijoor Consultants adds on a harsher note, “I do not believe this current spate of e-bay advertising is going to build anything much for it. I am personally not convinced that the set of retro-creatives do anything to the brand at all. At best, it causes for a perk-up in the awareness scores for the brand. I do not believe the campaign is efficient enough on the counts of building interest in the portal, stoking desire to visit and finally creating action of the actual buy.” However, how joyful will eBay’s India journey be would be clear in the coming months. If it is, it would be a marked shift in the attitudes of Indian consumers. If not, Pierre Omidyar might just realize that there are not many takers in India for broken lazer printers (the first ever product sold on eBay).

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Of Knights and Goddesses...

It is the name of an American anti-aircraft missile system. It is also the name of Poland’s famous literary award. Above all, it is one of the most depicted image on all Greek coinage and formed the design for the legendary Jules Rimet Trophy, given to the Football World Cup winners till 1970. And, as a footnote, it is also the name of a company run by a knight. A company that lives and breathes just three words - “Just Do it”. The name is Nike, the Greek goddess of victory and the knight is none other than Phil Knight. And the three words have become the most enduring words in modern sports history, thus paying true homage to the mighty goddess.

The genesis of this adrenaline pumping phrase is today part of Nike lore. It was the beginning of the hey days of the health and fitness mania that had gripped US in the late 80s. The age of aerobics was in full swing and Nike was loosing ground fast to arch rival Reebok (derived from the name of an African antelope) which had gone leaps ahead in aerobic footwear. In a meeting of some Nike employees with the company’s ad agency Wieden and Kennedy executives of the agency’s founder, Dan Wieden, impressed by Nike’s can-do culture, suddenly remarked, “You Nike guys, you just do it.” History was about to be created. Wieden got hooked to the words “ Just Do it” and realized that it was not the shoe but the attitude that defined the person wearing it. A person of all ages and both sexes.

Instead of the customary 18-40 age group, the first “Just Do it” spot debuted July 1, 1988 and featured a 80-year-old distance runner Walt Stack. Then came the TV and print ads that used clever lines and catchy music sporting multi-sport athlete Bo Jackson egging on people from every walk of life to ignite their inwardly focused competitor. Nike’s share of the domestic sport-shoe business soared to 43% from a flailing 18% while its sales rose to $ 9.2 billion in ten years by 1998 from the 1988 figure of $ 877 million when Reebock had taken over as the leading sports shoemaker for the first time. Nike spent $300 million on overseas advertising alone. Not just Bo, Nike also featured sporting icons like John McEnroe and Michael Jordon. The eight letters did to the fitness hungry crowd of the 80s and 90s what Beatles had done to the hippies in 1960s. In the end, Nike itself had a renaissance and the slogan became the one of the greatest marketing feats ever achieved in history.

Anchal Gupta

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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The runaway growth in motorbike sales over the last few years in India has a niche player hungering for a larger share of the pie. By Pawan Chabra

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They never cared two hoots about competition, did not encourage scantily clad babes in their ads and barely batted an eyelid before blithely including a comparison with a tractor in their feature list. Obviously, Eicher Motors’ Royal Enfield has had much more going for it than the sheer deep thump of its rakishly upswept silencer. The downside has been that even as Bullet’s cruiser imagery sells 45,000 bikes every year, Hero Honda makes hay in the commuter segment with unit sales crossing 35,00,000 annually. Sure, one should not compare – after all, bike enthusiasts worship the ground that the stylish Bullet walks on, while Hero Honda is merely a convenience for your daily office-goer. Siddhartha Lal, MD, Eicher Motors agrees, “We have no comparison with mass manufacturers. Royal Enfield riders use their bikes for purposes beyond commuting.”

But quiz Lal a little further and you realise that some changes in existing strategies at Enfield are in order. The niche bike brand, which has sold a meagre five lakh units in its 56-year-old history in India, is now targeting a bullish figure of one lakh annual unit sales by 2013. Explaining short-term targets, Lal says, “We are planning to touch 50,000 unit sales in 2009 (targeting a 15% rise year-on-year), followed by a target of 60,000 for 2010.” Already plans are in place for a Rs.65 crore investment over the next three years at its Chennai plant to double production capacity. Question is, can this planned doubling of sales turnover by 2013 be possible without tapping at least a little into the mass markets, presently dominated by Hero Honda, Bajaj and TVS? But the dilemma then is, will the Bullet come down a few notches from its cruiser positioning or is there more method to this strategy?

Company insiders are at pains to point out that their new ambitions can be achieved without any dilution in brand equity. “We have been able to sell whatever we manufacture and almost all our models have a waiting list,” explains R. L. Ravichandran, CEO, Royal Enfield. Clearly, Bullet’s established aspirational quotient amidst the Indian consumer is fuelling the ambitions of this bike company. Not putting all its eggs in the domestic market only, Enfield is also working on increasing its already expanding global reach. Its ventures in various developed markets are already a success. “We are exporting 5% of our total sales now. But we will take that to 15% over the next three to five years,” vows Lal.

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Buying on A ‘second’ thought...

The optimism of the giants is well supported by the handful of facts and figures. The size of the used-car market in India is estimated at about 10 lakh units per annum, and it is largely fragmented and unorganised. Going by experts claim, the share of the organised market in this segment is just 10% while the balance is shared by unorganised dealers (30%) and the biggest threat to the organised sector, personal dealings between the buyers and sellers (60%). Shashank Srivastava, CGM-Marketing, Maruti Suzuki avers, “The second hand car dealers are not the only threat to the certified pre-owned car dealers as most of the transactions happen on one to one basis.” However, the top honchos of the industry, like Jagdish Khattar, the ex-MD of Maruti Suzuki and CMD of Carnation Auto, expect the organised pre-owned segment to grow in leaps and bounds in the time to come. Set to try its luck in the arena, Khattar’s Carnation, which started a pilot project of selling used cars in Mumbai in August this year, is now all set to enter destinations like Cochin and Hyderabad by the end of this month. Khattar points out, “Awareness is only and the biggest challenge that I see in the used car segment. But as time will pass, the awareness will automatically increase among the buyers.”

However, the problem for the local pre-owned car dealers doesn’t end here. J.D. Power’s Used Vehicle Market Report revealed that the Internet shopping has reached parity with visits to dealer lots as the primary method for buyers to locate used vehicles globally. The report went further to find out that the percentage of used-vehicle buyers (in the US) dependent on Internet to locate vehicles for sale has increased from 40% in 2008 to 46% in 2009. “Internet shopping provides prospective buyers with the opportunity to search through enormous amounts of specific vehicle information without even leaving home, allowing for a more efficient medium of matching buyers with unique used vehicles in the market. In light of this, dealers should expect the Internet to continue to increase in importance among used-vehicle shoppers and adjust their online presence accordingly,” says Arianne Walker, Director- Marketing, J.D. Power and Associates. But does the situation in India show any such trend? Well, looking at the number of automotive websites like Carwale.com, Gaadi.com, Indimoto.com et al that are mushrooming thick and fast, expectations are high that soon the Indian pre-owned car industry will follow the western trends. Affirms Udit Bhandari, CEO, Indimoto.com, “The usage of websites for purchasing vehicles is increasing very fast in the country and I believe it has a lot of potential.”

Indian market, as said, is very different and versatile in the manner it operates. Today, the Indian consumers have moved an inch away from the conventional local car dealers towards the organised players, but when it comes to meeting the global trend, well the day is still far away. Someone has rightly said, ‘In the US people drive from the left, in India people drive on what’s left.’ Unlike the US, there is a dearth of websites like Kelly blue book in India (which provide fair valuations for the pre-owned cars) providing local dealers an opportunity to play foul. Also there is always a high possibility of mileage tampering due to the lack of a centralised database. Still people like Aryan do not subside the idea to peep at the neighborhood used car dealer’s collection before they buy one. Common guys, at least give some value to what is called an authentic warranty by the authorised dealer!

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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