Branding Decisions

Branding Decisions

Branding is an important strategy to differentiate the product from its competitors. Its a name ,logo ,trade mark, even patent number or package design, intended to identify the firm’s products or services from others. It represents to the customer the source of the product which leads him to associate with the brand. In taking brand decisions, the firm has to consider the target market, cultural influences on the market and the role the brand will play in its business strategy. Foe example, a brand name which is culturally alien will find difficulty in getting accepted in the market, like in the case of Kiss and Tell brand of cosmetics that failed in the Indian market. Besides, a firm has to ensure that a brand name is not banned because it represents either a national leader or the country.

The brand decisions a firm has to take are:

1.Manufacturer’s name ,i.e whether to have its own name on all products ,or
2.Marketing organization/Distributions brand name ;or
3.Adopt a combination of the two.

Manufacturer’s Brand Policy or National Brand Policy

This policy is based on the assumption that the manufacturer had built a reputation in the market, has strength in distribution and the firm had adequate financial resources to establish a new product in the market. Customer confidence in the firm is the prime factor in the manufacturer deciding to brand the production his own name. When the firm markets this product in its own name ,nationally, this may also be called the national brand policy Common examples are all leading national brands of all well known firms in India.

The options available to a firm here are :

1.Family brand name ;or
2.Independent brand name.

The strategy of family brand name works when its name brings positive associations in the mind of the consumer. To the customer ,it represents quality, reliability and assurance of meeting specific standards.

The strategy of an independent brand name is therefore advisable. This can also help to penetrate different markets segments which may buy the firm’s product for different reasons. This strategy can also ensure that the firm doesn’t lose its original position. For example ,if Hindustan Lever would have introduce different detergent powders under the name of Surf for different market segments and differentiated them only on the basis of price it could have run the risk of losing even the original positioning of an economical detergent powder to an economy conscious middle-class housewife

Even in the same market segment ,a firm may offer different brands of the same product but with different benefits and appeal. Consider for example ,Hindustan Levers’ Liril and Lux brand of toilet soaps in the premium market .Lux has traditionally been positioned as a beauty soap while Liril offers benefits of lemon. Thus, an independent brand offers extensive benefits without endangering the corporate image.

Mixed Brand Policy

The two options is for the firm to enter into a strategic alliance with a well-known marketing firm and let it market the product under its brand name in a defined geographical area .The manufacturer also continues to market the product under his own name nationally. This is done to fight regional competition .Consider Kelvinator’s strategy of marketing refrigerators in its own name and also that of others like Blue Star, Leonard and Spencer ,Whirlpool also lets Mirc Electronics market its washing machines under the name ONIDA.

This strategy allows the firm to take benefits of both the options spelt out earlier.
Brand decisions are central to new product launches and have to be carefully taken. These represent investments in future and also the degree of control the manufacturing firm wants over its marketing operation.

Positioning

Another decision in commercialization of a new product is how to differentiate it in the midst of an already over-communicated society of ours, where an average consumer screens out most of the messages .The strategy to differentiate the brand or product is to place it in an appropriate cell of the human mind so that whenever the customer recalls the product, the firm’s brand id the first to be recalled. This strategy is called Positioning .Positioning is the act of communicating company’s offer so that it occupies a distinct and valued place in the customers mind.

The concept of positioning was first advocated by Al Ries and Jack Trout ,two advertising executives in their articles titled The Positioning Era: A View Ten Years Later in Advertising Age in 1972 and later in their book Positioning :The Battle For Your Mind in 1982. According to them :

Positioning is not what you do to a product. But what you do to the mind of the prospect .That is, you position the product in the mind of the prospect.

Ries and Trout believe that marketing is like a war which is fought in the mind of consumers. They advocate that the marketer should perceive each consumer to mentally have a product ladder. The customer often knows brands in the form of this ladder. There is a brand on the top of the ladder (brand leader) and there are others that occupy the second and the third step in this ladder .Sometimes the top slot may be vacant and at other times there may be two or three brands vying for this pr4estigious slot in the customer’s mind .The rush for the top slot is understandable as people remember number one.

Developed vs Developing Markets

Developed vs Developing Markets

The needs of the emerging or developing world represent huge potential markets for food, clothing, shelter, consumer electronics, appliances and other goods. Many market leaders are rushing into Eastern Europe, China, and India. Colgate now draws more personal and household products business from Latin America than North America

The developed nations and the prosperous parts of developing parts of developing nations account for less than 15% of the world’s population. Is there a way for marketers to serve the other 85%, which has much less purchasing power? Successfully entering developing markets requires a special set of skills and plans. Consider how the following companies are pioneering ways to serve these invisible consumers:

Grameen Phone markets cell phones to 35,000 villages in Bangladesh by hiring village women as agents who lease phone time to other villagers, one call at a time.

Colgate Palmolive rolls into Indian villages with video vans that show the benefits of tooth-brushing; it expects to earn over half of its Indian revenue from rural areas.

An Indian-Australian car manufacturer created an affordable rural transport vehicle to compete with bullock carts rather than cars. The vehicle functions well at low speeds and carries up to two tons.

Fiat developed a "third-world car," the Palio, that far outsells the Ford Fiesta in Brazil and that will be launched in other developing nations.

Corporacion GEO builds low income housing in Mexico. The two-bedroom homes are modular and can be expanded. The company is now moving into Chile and southern U.S. communities.

A Latin American building supply retailer offers bags of cement in smaller sizes to customers building their own homes.

These marketers are able to capitalize on the potential of developing markets by changing their conventional marketing practices to sell their products and services more effectively. It cannot be business as usual when selling in developing markets. Economic and cultural differences abound; a marketing infrastructure may barely exist; and local competition can be surprisingly stiff. In China, PC maker Legend and mobile phone provider TCL have thrived despite strong foreign competition. Besides their close grasp on Chinese tastes, they also have their vast distribution networks especially in rural areas.

Smaller packaging and lower sales prices are often critical in markets where incomes are limited. Hindustan Unilever’s 4-cent sachets of detergent and shampoo have been a big hit in rural India, where 70% of the country’s population still lives. When Coke moved to a smaller 200ml bottle in India, selling for 10 to 12 cents in small shops, bus-stop stalls, and roadside eateries sales jumped. A western image can also be helpful as Coke discovered in China. Part of its success against local cola brand Jianlibao was due to its symbolic values of modernity and affluence.

Recognizing that its cost structure made it difficult to compete effectively in developing markets, Procter & gamble devised cheaper, clever ways to make the right kinds of products to suit consumer demand. It now uses contract manufacturers in certain markets and gained eight points in Russia for Always feminine protection pads by responding to consumer wishes for a thicker pad. Due to a boom in consumer spending, Russia has been the fastest growing market for many major multinationals including Nestle, L’Oreal, and IKEA.

The challenge is to think creatively about how marketing can fulfill the dreams of most of the world’s population for a better standard of living. Many companies are betting that they can do that.

After launching Buick in China in 1999, GM poured more than $2 billion into the region over the next five years, expanding the lineup to 14 models, ranging from the $8,000 Chevrolet Spark mini car to high-end Cadillacs. Although competition in the third largest car market is fierce, GM was able to secure 11% market share in 2004 and reap sizable profits. But initial gains in the Chinese market do not necessarily spell long term success. After investing to establish the markets, foreign pioneers in television sets and motorcycles saw domestic Chinese firms emerge as rivals. In 1995, virtually all mobile phones in China were made by global giants Nokia, Motorola, and Ericsson. Within 10 years, their market share had dropped to 60%. To secure and build on its gains, General Motors pledged to invest another $3 billion in the region to boost capacity and build its reputation.

Organizations must be family friendly

Organizations must be family friendly

Employees today are asking for a workplace that helps them balance the demands of their work and family lives, rather than forcing them to choose one over the other. Organizations have also accepted that among the many other aspirations of employees, the most important is one that seeks to be able to ‘provide well’ for their families Amongst the many schemes that organizations have introduced for their employees, having special schemes for their children is the latest addition. While some are offering various schemes like scholarships, medical benefits, and training some young kids to accompany their mothers to work. Many organizations boast of instances where they have gone out of their way to extend special help to the child of a particular employee.

At NIIT, one would witness various examples of how these commitments have been actually put into practice. Little NIITian is a special name given to the kids of NIITians (read: employees), who are a special part of NIIT. The company’s ‘calendar’ is dotted with many fun activities which encourage active participation from these little ones. No matter what the occasion, if it touches and concerns a NIITians or his / her family, the company tries to be a part of it. Amongst the many schemes which the company offers towards employee welfare, the one which was found most special was the one wherein on the birth of a little NIITian, the company contributes a sum as investment in the name of the new born. NIIT also has schemes like ‘Little NIITian Care Leave (LNCL)’ under which, the NIITians can avail half time working hours on half pay, to take care of a child at home. The leave can be utilized for a maximum of six months period for half days till the child is one year old.

High expectation levels, increasing attrition rates and increasing demand for work life balance has forced organizations to look beyond run of the mill HR interventions. Objective is to create ‘Home away from Home’, an atmosphere where the basic needs of employees are met and they don’t have to be bothered about the daily routine tasks. Under the ‘Child Care Support’ scheme that the company offers, crèches, workplace nurseries, out-of-school care, holiday play schemes and after school clubs are included Similarly, Cellebrum proposes to have scholarship programs, wherein the child of a meritorious and tenured employee with good academic records will be given scholarship fees based on the company’s policy. “Cellebrum has already initiated tie ups with various schools / institutes to take care of the child’s admission at the time of relocation. There is also a ‘Career Counseling Cell’ which provides in-house career counseling options for children of employees.

Amongst the various schemes that 24/7 Customer has initiated for the families of its employees, some of the most prominent ones include ‘Family insurance Scheme’, ‘Employee Welfare Fund’,’ Family Oriented Reward Program’, ‘Reward & Recognition,’ ‘Parents Day’ and ‘Daycare Centre’. 24/7 Customer is the only BPO in India to provide extended insurance to the employee and their families (employee plus four dependents). Under the ‘Employee Welfare Fund’, employees in any kind of medical emergency or need can avail it as a loan. There are instances when one of the family members of an employee had to undergo a major surgery and the amount from this scheme proved to be very helpful. Every month, on Parents Day, the family members of employees are invited to spend a day with their children/spouse/sibling.

Value to the customer

Value to the customer

There is the most difficult question: “what does the customer consider value / what does he look for when he buys the product?”

Traditional economic theory has answered this question with the one word: price. But this is misleading to be sure there are few products in which prices are not one of the major considerations. But first ‘price’ is not a simple concept.

For a fuse box and switch box manufacturer; his customers, the contractors, are extremely price conscious. Since all the boxes they buy carry a quality guarantee accepted by the trade as well as by building inspectors and consumers, they make few quality distinctions between brands, but shop around for the cheapest product. But to read “cheap” as meaning lowest manufacturer’s price would be a serious mistake. On the contrary, “cheap” for the contractor means a product that has a fairly high manufacturer’s price: a product that (a) cost the least money finally installed in the home(b) achieves this low ultimate cost by requiring a minimum of time and skill for installation, and© has a high manufacturer’s cost to give the contractor a good profit. Wages for skilled electrical labor being very high, low installation costs go a very long way to offset high manufacturer’s price. Furthermore under the billing tradition of the trade, the contractor makes a little money out of the labor required for installation. If he is not his own skilled worker, he bills his customer for little more than his actual wage costs. He makes his profit traditionally by charging double the manufacturers price for the product he installs. That product that will give him the lowest cost to the home owner with the lowest installation cost and the highest mark-up on the product that is, the highest manufacturer’s price is therefore the cheapest to him. And if price is value, then high manufacturer’s price is better value for the electrical contractor.

This may appear to be a complicated price structure. In the American automobile industry, where most new cars are sold in trade against a used car, the “price” is actually a constantly shifting configuration of differentials between the manufacturer’s price for a new car, a second hand and third hand used car, a third hand and fourth hand used car, and so on. And the whole is complicated on the one hand by constantly changing differentials between the amount a dealer will allow on a used car and the price he will ask for it, and on the other hand by the differences in running costs between various makes and sizes. Only advanced mathematics can actually calculate the real automobile “price.”

And, secondly, price is only a part of value. There is the whole range of quality considerations: durability, freedom from break down, the maker’s standing, purity, and etc. high price may actually be value- as in expensive perfumes, expensive furs or exclusive gowns. Finally, what about such concepts of value on the part of the customer as the service he receives? There is little doubt, for instance, that the American housewife today buys appliances largely on the basis of the service experience she or her friends and neighbors have had with other appliances sold under the same brand name. The speed with which she can obtain service, if something goes wrong, the quality of the service and its cost have become major determinations in the buyer decision.

Indeed, what the customer considers value is so complicated that it can only be answered by the customer himself. Management should not even try to guess at it. It should always go to the customer in a systematic quest for the answer.

BPO Policies: 5 Emerging Trends

BPO Policies: 5 Emerging Trends

Watch out for the next three years! A turbulent phase of global consolidation and aggregation should see Indian BPOs and KPOs emerge bigger and stronger. Some may even become MNCs and global industry leaders. Human resources will, however, be the key challenge at the industry level as well as for the individual HR professional. Successful HR managers will have to be prepared for five emerging trends.

Here are a few key trends which he claims may get overlooked. The top five are:

• The next three years will see a lot of mergers and acquisitions in BPO space worldwide.


• Most new voice/data BPOs will be at least 1000 seaters while KPOs serving any specific domain, 100 seaters.


• Attrition will rise in the middle and top levels leading to a talent war.


• Most top Indian BPO/KPO companies would have multicultural/multinational operations/workforce.


• Bottomline: Those who focus on brand building will perform, others will perish.

HR managers who are better prepared to handle these trends are more likely to perform rather than perish. That means, they must be prepared for:
M&As
Scalability
Talent War
Multicultural Ops
Brand Building

Not that all factors will be applicable to all organisations in BPO/KPO space. Each business will have its own strengths and opportunities and weaknesses and threats. The individual HR manager too has to asses what his/her organization specifically needs. A proactive manager will try to outguess the board and keep some plans ready even before they are actually asked for.
An M&A human resource impact study keeping in mind any one/several possible victims/predators in mind is a good example. M&As are complex and traumatic affairs from a HR point of view. In case one’s organization has any chance of becoming a participant in any M&A event in the near future, a little early planning can prove to be a big help.

Similarly, being all ready to ramp up overnight, as it were, due to some early preparation on your part, can only earn you kudos from the guys who matter. The same can be said about each of the other big trends such as the possibility of talent war or multicultural and multinational operations. The key issue is to correctly asses which way your own organization is headed and then to be specifically prepared for it.

Some companies will not bother much about brand building – either because they don’t need it or care for it, for some reason or the other – but most others would do so. That would mean an additional set of headaches for HR professionals. Apart from the many intangible values that add up to create robust brand equities, some very necessary and tangible aspects are getting certifications of various kinds, following industry best practices and maintaining/improving delivery standards. Achieving these goals will require constant development of HR systems and processes. In plain English that simply means more work for the HR professionals.

Managing human resources in an HR and knowledge intensive BPO/KPO industry was never easy, but with a period of turbulence about to set in, its just going to get tougher! But then being forewarned is being forearmed – just ride out the storm.