HE'S the brand juggler. The promiscuous consumer. He's the biggest problem Indian marketers have ever faced. Across markets and demographic categories, consumers ate exhibiting a streak of infidelity to brands they have used faithfully and unquestioningly for years, maybe even decades. Suddenly, marketers are having to question their assumptions, rewrite their strategies and radically hike their budgets.
"Brand loyalty as we understood it traditionally in India, was very different from the western concept," says a senior advertising executive. "in India, brand loyalty has been a function of availability rather than competition, and sentimental attachment rather than functionality, while in the West, brand loyalty means being able to keep your customers with you for long periods of time in the face of 25 other brands which are also aiming for the same guy." In that sense, the Indian consumer was only a spurious brand-loyal buyer in the absence of choices. That is, his loyalty was not intentional. Today, the nature of brand loyalty has shifted from the Indian definition to the western reality.
The reasons are obvious:
You see the brand juggler all around you, checking out new brands at retail outlets and trying them out, abandoning the brand he had been using for years with casual indifference. The hallmark of the brand juggler is the fact that he does not stick to any particular brand, preferring instead to keep switching from brand A to brand B to brand C and then back to brand B. He has no loyalties, he is looking for thrills in every brand-use experience. Variety is the spice of his life and times. He is thus the cruellest consumer that Indian marketers had ever bargained for.
The upshot: increasingly, consumers' associations with brands are more shortlived than ever before. Marketshares are under pressure. In the last two years, Colgate's share of the toothpaste market has fallen from 85 per cent to about 60 per cent. Dettol, synonymous with liquid antiseptics for decades, is suddenly facing a tough challenge from Johnson Sr Johnson's Savlon, which has managed to grab a double-digit chunk of the market. Upstarts Videocon and BPL have eaten into the marketshares of Godrej and Kelvinator.
With the consumer a moving target, it's that much more difficult for the marketer to get him clearly in his sights. And the most carefully-crafted marketing strategies begin to resemble shots in the dark. Consider two of the soaps launched by Hindustan Lever Ltd (HLL) in the last couple of years--Le Sancy and Dove. Both achieved very high trial rates and based on initial reports, HLL Seemed to have winners on its hands. Within months, however, the prognosis changed completely. The brand juggler, ever ready for a novel experience, tried out the new soaps but never bothered to come back.
How do you get this brand-surfer to stick to your brand?
Arun Kapoor, general manager, Reckitt & Coleman, explains the Dettol philosophy: "Dettol is an emotion in that it arouses feelings of dependability, protection and faith in the consumers who are loyal to it owing to these very attributes that they associate with the brand." But he admits that market leaders can no longer afford to take their consumers for granted. "In today's world, the only way to ensure the fidelity of the consumer is to constantly upgrade quality and provide value for money. Companies have to change their business orientation from 'finding consumers for their products' to 'tailoring products to consumer needs."
Since the promiscuous consumer demands variety, one way to keep him satisfied and loyal is to constantly innovate and improve. For HLL, tinkering with product formulations in search of a better reason-to-buy for the consumer has become a way of life. The company also rejuvenates each one of its advertisements once a year, ranging from barely visible changes to creating totally new campaigns.
Another tactic, if you can't stop the consumer from switching brands anyway, is to make sure that he at least shifts to another of your own brands. So keep launching brands all the time, with different selling propositions, till you cover the whole spectrum of consumer needs. Example: Colgate-Palmolive, hurt by the rise of gel and medicinal-appeal toothpastes, has now flanked its core brand with Colgate Gel, Colgate Total and Colgate Tartar Control.
"Loyal customers expect a good price, first and foremost," says Rajiv Bakshi, vice-president (marketing), at Cadbury's. The company's strategy to capture consumers as been to keep price rises down to 3 per cent per annum in the last three years, well below the increase in the price of raw material through technology upgradation and growth based on volumes. Price is also the company's principal weapon against Nestle's new Indian launch, Kit-Kat, priced at Rs 12 for 35 grams. Close on its heels, Cadbury's has launched Perk at Rs 7 for the same size. Nestle is however trying to woo retailers with promotional schemes like cash discounts, among others, in a bid to jostle for better displays. Says Bakshi: "We will match Kit-Kat head-for-head as chocolate is our bread and butter while for Nestle it may just be a peripheral business."
"The real magic of consumer loyalty is that powered by repeat sales the market share grows, and companies are finding this imperative more compelling than ever before and reacting in different ways to create better value for money," says Arun Joshi, project director at the Indian Market Research Bureau (IMRB). Sales promotion deals are on the rise, offering the customer tempting bargains. Maggi Tomato Ketchup's offer of a free sample of Tonite's Special has been matched by Kissan's free sample of equivalent value. Colgate-Palmolive has just launched a great value pack promises 25 grams extra for the same price. Godrej shaving cream is offering a Gillette Presto razor free with each pack.
"Our research shows that cracking the price-value equation continues to be the best bet to capture consumers in a price-crazed environment and promotion deals do not in any way cannibalise genuine sales," says Vikram Sakhuja, research manager at Procter Sr Gamble. The company has been using a multi-pronged strategy of developing products in the premium segment like Camay and Pampers while resorting to brand extensions as with Whispers Wings and trade promotion deals to expand marketshare.
As a natural consequence of reduced brand loyalties, the marketing battle on the retail shelves has got more vicious than ever before. The logic is simple: if the consumer is not unquestioningly loyal to any brand any more, the more visible your brand is on the retail shelves, the better the chances of it being picked up. As a result, brand managers are allotting a greater proportion of their budgets to sales promotion devices as free samples, point-of-purchase deals and special price deals at the expense of advertising. Currently, every third brand in the grocer's shop is offering some kind of trade promotion deal. Which means pressure on marketers' margins.
But then, marketers realise that the happy days of nicely structured markets where predictions based on market research made sense, and the customer could be relied upon to act in a reasonably reasonable way, are gone. For ever. And the implications of brand juggling go far beyond short-term marketshare losses and hiked media budgets. No marketer can today hope to launch a brand that would grow to be another Nirma, another Lifebuoy, another Bajaj. From now on, markets will be shared between many players, and marketers will not be able to gamer huge shares of the pie. The promiscuous consumer has made sure that the days of the Big Brand are over.