The ‘Fear Factor’ in Politics

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On the face of it, the message being sent out by the President of BJP is quite purposeful and positive. Who wouldn’t want an India that doesn’t vote on the basis of religion? But then, when it comes to the foot soldiers of the party who actually ‘contact’ the consumer in the field during elections, the gospel of equal distance between religions somehow gets transformed into an invocation of the lurking ‘fear of the other’. Just look at what Varun Gandhi, grandson of Indira Gandhi and great grandson of Jawharlal Nehru had to say while campaigning in his constituency in Pilibhit in Uttar Pradesh. If nothing else, it was a clear assertion that you can’t trust Muslims and that a vote for Varun Gandhi will mean the protection of Pilibhit Hindus from Pilibhit Muslims. Much has been said and written about the ethics and morals of the now notorious Varun Gandhi speech. But beyond the rhetoric, the brutal fact remains that the ‘fear factor’ will once again be decisive if Varun wins and turns out to be a smart marketing strategist.

In fact, the rise and rise of BJP and its prime ministerial candidate L. K. Advani can be clearly linked with the power of the ‘fear factor’. It was the Shah Bano controversy during the mid 1980s that created genuine misgivings amongst millions of moderate Hindus about the alleged appeasement of Muslims. BJP successfully parlayed this apprehension into a powerful marketing strategy. So successful was the strategy adopted by L. K. Advani and his team of strategists that the BJP actually emerged as a ‘national’ rival to the Congress.

The Left too has its own version of fear factor to play around with. Says, CPI leader D. Raja, “Our line of campaign is entirely different… We speak for the poor people, we fight for the interest of the people, for sovereignty, for secular values.” The message outwardly is positive. But at the ground level, much of the real message is visceral distrust and dislike of the United States of America. The Left still thinks that Uncle Sam is a malevolent imperial power and that the people of India would be scared enough of Uncle Sam to vote Left. No wonder, their appeal has dwindled over successive elections, except the unexpected bonanza in the 2004 General Elections.

And what of the Congress? The party was clearly the pioneer of the ‘fear factor’, using it dramatically & successfully back in the 1984 elections when Rajiv Gandhi won a historic mandate. But those glory days are well and truly gone and Congress represents a tired national brand whose market share is being constantly nibbled away by aggressive regional players. In state after state, the core competence of Brand Congress has been hijacked by regional parties and it has not been able to retaliate. In that sense, Brand Congress is like Brand Bajaj. Till the 1980s, both the Congress and Bajaj completely ruled the market. Their ‘hegemony’ was virtually unchallenged. To buy a Bajaj was to be an Indian. Contrast that with the situation today where Bajaj has become the No.3 two wheeler company of India. Can both Congress and Bajaj reinvent themselves and find a new positioning strategy?

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Source : IIPM Editorial, 2009

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

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You may fly no more!

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Current economic conditions are threatening survival for many aviation players. Tremendous scaling back is needed to avoid bankruptcy, says Ratan Lal Bhagat of 4Ps B&M

“Students open your textbooks to page number nine, chapter 11,” stoutly commanded the elderly professor. The students, who dreaded calculus, knew that their worst nightmare had just begun.

Players in the aviation sector dread Chapter 11 too, but not for the reasons that the students do. This is the chapter that airlines have to open when their flawed business models throw their business calculus (read profits, revenues) into complete disarray. They now have to look into the ever dreaded Chapter 11 (bankruptcy) despite loathing it from the bottom of their hearts.

According to a report by Centre for Asia Pacific Aviation (CAPA) more than 30 airlines the world over, like Frontier, Skybus et al, have been forced to shut ‘hangar’ and file for bankruptcy in the past 12 months. Many others like Continental Airlines, US Airways, Southwest Airlines, Alaska Airlines, et al are all passing through bad times and are on the verge of being grounded.

“The revenue outlook is not encouraging, but we remain competitively well-positioned. We are seeing declining revenues on international routes, but these are still good markets for us,” explains Larry Kellner, Chairman & CEO, Continental Airlines to 4Ps B&M. Delta Airlines and Northwest Airlines, wich have already swallowed the bitter pills of bankruptcy (in 2005) have come together to avoid a round two of the heart shattering episode. “Given the difficult economic environment we face, the flexibility in the system is even more crucial and we are moving quickly to create a flight schedule for 2009 that optimises the profitability of every route,” professes Jimmy Eichelgruen, Regional Director Sales, India, Middle East and Africa, Delta Air Lines exclusively to 4Ps B&M.

Many of the players who had dialed the frightful number in 2008 were hard hit by the sharp surge in fuel prices. However, while the economy was relatively strong, many airlines found that they were able to pass on these cost increases to passengers in the form of fuel surcharges, which added to the already high fares. The global economic slump is perhaps a more challenging situation than high fuel because airlines have limited ability to maintain demand and yields in a softening economic environment. “The current economic downturn is extremely challenging for the airline industry. There has been a particularly pronounced fall in premium class and cargo revenue. In December 2008, premium class traffic in Asia declined 24% year-on-year. Not only are airlines finding that fewer passengers are flying, yields too are declining,” explains Binit Somaia, Regional Director, CAPA. And it is evident that the current economic mayhem might prove to be the culprit bird that could get sucked into the propellers of these airlines, forcing them to crash land.

The accumulated loss for airlines was a whopping $5 billion loss in 2008. All these have been fuelled by the global international cargo traffic, plummeting by 22.6% in December compared to December 2007. Whereas a similar comparison for international passenger traffic showed a 4.6% drop. The international load factor stood at 73.8%. Moreover, throughout 2008, international cargo traffic was down 4%, passenger traffic showed a modest increase of 1.6%, and the international load factor stood at 75.9%. All the aforesaid factors, along with the gradual decline in the cash reserves of these players over a period of time, seems to only add pace to their fall and force them to file for bankruptcy.

Furthermore, the International Airport Transport Association (IATA) forecasts a further loss of $2.5 billion based on a fuel price of $60 per barrel in 2009. It further states that there would be a decline of 3% in passenger volumes, 5% in cargo traffic and yield deterioration of 3%. Moreover, industry revenues are expected to contract by $35 billion yoy to reach $501 billion in 2009. “2009 is shaping up to be one of the toughest years ever for international aviation. Keep your seatbelts fastened and prepare for a bumpy ride and a hard landing,” said Giovanni Bisignani, Director General and CEO, IATA. Somaia straight-facedly sums it up, “It is likely that we will see more carriers enter bankruptcy in 2009.”

The only way out is through controlling costs, cutting down on fleet size and maintaining a sustainable cash reserve. “In an environment of declining demand, the most effective solution is to reduce capacity, which would mean grounding aircraft,” explains Somaia. The Delta-Northwest joint collaboration is already applying such measures. Testifying to the fact, Eichelgruen of Delta explains, “We are cutting international capacity by 3-5%.... We are watching each route very carefully to ensure we are matching capacity to demand.” Surely, Delta has set its priorities right. A lot of such cuts in operations will be needed before the players get their business calculus right in order to avoid turning to the dreaded chapter 11!

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Source : IIPM Editorial, 2009

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

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Feeling good in bad times

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Recounting McDonald’s and Horlicks’ experiences is not simply to indulge in back-slapping about past successes in the troubled economic times that we face today. The idea is to see what they did to deal with their version of ‘bad times’. While the Horlicks’ positioning ‘win’ is merely a tale of a brand combating the phenomena of its cyclical sales; and McDonald’s was only trying to tide over a global health sentiment; this time the crisis is of global confidence. Globally, as in India, brands in the auto, financial services, FMCG and consumer durables sectors particularly are reeling under the liquidity crisis that the global economy is facing. Sure, America, Japan and Europe are in more trouble than India and China. But hey, remember the bright guy who coined the smartass phrase about the world catching a cold when America so much as stifles a sneeze? Well, so here is India, suffering from the global meltdown, despite a 6-7% projected growth rate, a 300 million strong consuming class in its infancy and more than 40 million government employees having just got tonnes of money thanks to the 6th Pay Commission. But banks are refusing to lend, so consumers have less to spend; some are getting the sack, so others are holding back (from loosening their purse strings that is!); there’s too much negativity in the air, but is it all fair?

Not really! Because the slowdown is temporary and brands that play their cards well will emerge stronger when the tide subsides. Globally, recessions and slowdowns have a knack for either making or breaking a brand. Take the 1930s depression. Unlike its rival dry cereal brand Post in the US market, Kellogg’s maintained its marketing spends. Kellogg went on to dominate the dry cereal market for the next 50 years. Beer company Miller almost doubled its ad spends during the late 70s recession. Seeing them, close competitor Schlitz also increased its spend. But it was a little too late. Schlitz was a virtual nobody when markets returned to normal, while Miller had gained considerable mind and market share.

But this is not merely about ‘abnormally’ increasing advertising spends. It’s about thinking out-of-the-box and daring to dream beyond the clichés of traditional business prototypes… It’s about fresh imaginations and beliefs… and it’s about your marketing programme in its entirety, from product development, to market penetration, to new markets, to your positioning (so that your brand is in sync with the ‘bad’ times). The good news is that a connected world has ensured marketers in India are not just prepared but are already devising and implementing exigency antidotes to deal with this ‘crisis of confidence’. Sure, the dampening last quarter results did cast a gloomy shadow over Corporate India, but for some, their creative – and not necessarily expensive – marketing tactics have begun to pay off, and handsomely at that! The fighter brands seem to have taken a leaf out of Millward Brown’s Survival Tactics for Marketing during Recession – a note published and widely circulated in May 2008.

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Source : IIPM Editorial, 2009

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

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Cashing in on optimism!

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Want to improve sales in adverse conditions? Positive tag-lines should do the trick...

Crashing stock markets with evaporating values, increasing inflation with rising prices and tight liquidity with the dreaded pink slip issuance; the world is in doldrums. The populace has been engulfed in pessimism as the financial downturn creates an unprecedented hole in its pocket. As a result, purchasing power for even daily goods has been curtailed, hurting the bottom lines of many companies. In this bleak outlook when consumer confidence is at an all time low, corporations need to think out of the box. Vulnerable, major players have come out with ‘feel good’ taglines to hold on to their audiences.

In its bid to actuate things in a positive direction, Coca-Cola has decided to replace the ‘Coke side of life,’ the company’s tag-line of the past three years, with ‘Open happiness.’ Pepsi on the other hand has come up with its new campaign, ‘Every generation refreshes the world,’ while CK has launched the ‘We are one’ campaign. Showing its innovative side, Dunkin’ Donuts has come out with the tagline “You kin’ do it”. Not staying far behind, traditional players like IKEA and Mercy too have unveiled their new feel good campaigns, ‘Embrace change’ and ‘Believe’ respectively. Players claim that the current campaigns are meant to offer encouragement and a spirit of fun during these challenging times. “‘Open Happiness,’ embraces a positive outlook. It is an invitation to open ourselves to the positive aspects, to happiness, and to the potential for a better tomorrow,” explains a Coca-Cola, India Spokesperson to 4Ps B&M.

Before coming to a point, it must be understood that whatever marketing strategies corporations adopt, the sole motive is always boosting sales. Moreover, in the current market situation players cannot afford to lose their current customer base by not being innovative. “There is plenty of evidence suggesting that the tagline when used concurrently with other aspects of the brand such as the logo, colours and other auditory & aural stimulus, is likely to impact sales,” supports Stephen Byrne, Director (Strategy), DIFFUSION. These players are technically betting big on positive psychology in order to persuade audiences. A good and positive tagline increases the brand recall, leading to prompt purchases. “All this is part of a global movement towards more emotive and less functional taglines,” adds Byrne.

Interestingly, most of these ‘feel happy’ taglines are a response to competition’s calls rather than a perceptual favour to consumers. Evidently, the customer was of course always the king, but then it’s the corporations that laugh all the way to their banks!

Ratan Lal Bhagat

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Source : IIPM Editorial, 2009

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

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CELEB ADS IN BIG TROUBLE?!

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Just-exited-from-Ogilvy, Creative Director, Titus Upputuru offers his take. “There are advocates in India whose daily job is to pick up stuff that they deem to be incorrect of offensive. I remember I did this ad when I was with TBWA. It was against marble excavation. I wrote a headline that said ‘Somebody please stop this guy from hitting his mother on the head repeatedly with the hammer.’ Now that was supposed to be in the context of mother earth and stuff. But a huge hullabaloo was created saying we are encouraging violence against mothers. Now isn’t that crazy? And we had no option but to stop the next lot of releases. I guess there should be a body that has better representation from the industry who have the discernment to check if the ad is really misleading.”

Ujjal Sinha, CEO of the Kolkata-based ad agency, Genesis, believes that it is more posturing than the real thing. “I would like to see who or which body has the guts to throw Big B, SRK or Sachin Tendulkar in the cooler! Does every promise that they dish out through their endorsements to attract the desired response, resonate with solid facts that can be proved? Highly unlikely.” That at least something (at long last) has been done in this “surreal area” seems to please school teacher Radha Iyer. The 30-year-old believes that it could well work as a ‘warning’ to both companies and celeb endorsers, forever doing their bindaas, irresponsible number in this space. “Hopefully, they will look before they leap,” she adds.

Are they? Will they?

As this goes into print, Sani Fresh has signed on TV star, Saakshi Tanwar as their brand ambassador; Bollywood’s new sensation, Asin [Ghajini] has been scooped up by Tata Sky and Shahid Kapur has signed the dotted line for VIP travel gear brand. Is there a brand-fit between product profile and celeb profile? Will the consumer product promise really deliver the goods… or will misleading claims, riding on red-hot celeb-endorsers, continue to blaze away? Authoritative and high profile voices have lauded this move and are of the belief that it would definitely create “transparency between all parties involved as also encourage ad agencies to get genuine clients. It would also work as an effective filter and weed out irresponsible hustlers, while protecting consumers, ad agencies, companies and celeb endorsers from getting duped.”

Rhetoric or resolve? Only time will tell… in the meantime stand by for a fresh slew of celeb endorsements with mobile number pay cheque fees! Oh, also take a close look at prisons in your friendly neighbourhood lock-up for a whole new and starry version of Jailhouse Rock!

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Source : IIPM Editorial, 2009

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

For More IIPM Info, Visit below mentioned IIPM articles.
1500-plus IIPM students placed across the country with 44 bagging international offers
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