Celebrity Endorsements

Today, while reading Warren Buffett's letters to his shareholders, the first thing that struck my mind was the characteristics of a celebrity endorser.

Read the letters @ http://www.berkshirehathaway.com/letters/2009ltr.pdf

Who would be a better endorser than the CEO of the company himself. He is the most credible person in the company. He has highest knowledge about the company's products and knows the needs that those products fulfill.

Now this brings us to the question, that if such a celebrity is already present than why do companies go for actors and players.

Well, there can be many reasons, but the two most important reasons I can think of are:

Product characteristics and Awareness in general public.

By product characteristic I mean that, if you want Celebrity for a sport shoe ad, it will definitely be a sport person and not a fat CEO. Similarly for a beauty product it would be a good looking model and not a person with big, fat glasses.

Another important point here is awareness in public, this is important because we believe only them whom we know. If we don't know someone how can we believe him, what will be the basis of credibility.

But, the second problem can be solved; by giving more and better exposure to the CEO a company's PR department can have a potent tool. This can be done in many ways, depending on the business again and this will increase the credibility of business as a whole which might positively effect the perception towards products.

Its not a completely new idea. Many CEOs are doing it, unknowingly though.

For eg. can't a person say that Kingfisher's products will fall in premium category just by knowing about Vijay Mallya or Virgin's products will attract the younger audiences by knowing about Richard Branson. Or can't people just invest in the stocks Warren Buffet invests in, they can and they do.

But still there are only very few examples, the reason being, CEOs are infamous for filling their pockets and leaving shareholders and customers empty handed.

This is perfectly described in the famous joke :

there were 3 CEOs in a plane. To test them, they were told that the engine in this plane was made by their company. 2 of them immediately got down out of fear, but one didn't. When he was appreciated about his confidence in his company's products, he said: Well, yes I have full confidence in my company's products, I knew if it was from my company, it would never have started.

So, if companies are able to develop trust in public for their CEOs, they can be an effective and efficient tool to not only attract customers but also shareholders.

Internet, services bundling and Google

When my professor said that in order to succeed on internet you must have a different name from your offline name, I couldn't agree with it. Why go through all the pains of choosing a new name and branding your service again when you already have a successful brand. And why wouldn't any customer accept the offline name, which is synonymous to quality and good service, and want the retailer to have a different name.

Today, while talking about a new networking site, I got the answer. And the answer is Internet, as any other service, is intangible and thus it is all about the experience it provides. Well in that case a firm that provides good service can keep the same name offline.

The answer is NO. Because the parameters of experience on internet are different.

Some of these parameters are ease of communication and ease of navigation i.e. how easily the pages load, how easily you can move from one page to other, is there any chance of posting of user generated content, the graphics of the site, no. of features on that site for eg. chat, picture and video sharing etc.

Another parameter is the experience associated with brand. And this is where it all makes the difference. on internet, if you are established as an e-mail site you tend to remain as one. If you help user share content or if you are a micro blogging website you remain one. And that is the reason that e-bay is the first name that comes to mind when you have to shop and not Yahoo! shopping.

This brings us to subject of today....BUZZ. Yet another extension by Google to compete with Twitter and Facebook. Many are optimistic that Buzz will surely take away the market from Facebook and Twitter; the reason being: it is integrated with g-mail so now people do not need to go on other sites for social networking.

But I feel it will not affect Facebook and Twitter in any ways apart from introducing some more members to the world of micro-blogging. It will help in growing the market but it will not take away the share of Twitter and Facebook. The reason being it simply doesn't provide the experience of Twitter and Facebook. When you Buzz you still are on g-mail and that is the experience you get there, while on Twitter, Facebook and even Orkut, the experience is completely different.

So, I think if Google really wants to fight in the micro-blogging space it should develop Buzz as a completely different platform and not just as a add-on to g-mail.

The best examples will be, people use you tube for watching videos and not Google videos and the writer here is using Blogger for writing this post and not Buzz, though the features are combined.

So, Buzz has the potential to be successful but it should come out of the shadow of G-mail and Google and develop itself as a different brand.

Marketing research as a tool for promotion and selling

When my friend told me to join his group for promoting his event I was very happy. There was somebody who thought that I can help him, I can make a difference.

First, let me tell you what the problem was. My friend is organizing a Video- game competition in our college and though there are many people who love playing games the registration for the contests were very less and the reasons were unknown.

When I thought about this I was really confused as I could understand only one reason for people not registering, the lack personalized approach. Now what is that; well that means that they were not contacting any one, they had their posters, e- mails and a small counter in the mess, which led to the big mess that they were in.

So, I had only one conclusion in mind, they needed a personalized approach but were there any other problems or not, I had no idea.

And this is when the idea clicked; a survey for promotion and selling.

The initial idea was of a survey to identify what types of games people wanted and the reasons why people were not interested. There were 2 possible approaches i.e. online research i.e. online form and Personalized research. The latter seemed costly and more time consuming initially but gradually the advantages were clear.

Personalized research gave the advantage of contacting more people and getting their attention while in online research there was a chance that many wont even look at the content of mail.

Hence a personalized approach was necessary. Also this approach would help in generating curiosity in mind of respondent. Now this can be understood by need for closure.

According to the theory of consumer behavior every person has a need for closure i.e. they want to see the ending. Do you remember when u started a book and you wanted to know what happens in the end of story or climax of a movie. Similarly we all have the need for closure.

So, when someone knows about an event that is going to happen they would like to know more about it. when they know more about it they will talk more about it and this gives you a good word of mouth. Which might help in getting more registrations.

A good way to generate a positive word-of-mouth.

And I always thought the sole reason that products with a prior research done, perform well coz they know what people want.

May be the reason is just that people want to know what the product is all about.

Ps of Marketing

Today in class when we were talking about the Ps of marketing, one of my friend said that experts say that the 4Ps can sufficiently describe the Marketing strategy. So true isn't it.

Than why did the 11Ps or 10Ps came in, and what are these.

The 11Ps of Marketing are: Product, Price, Place, Promotion (original 4Ps), People, Process, Physical Evidence (Added 3 for services), Positioning, Packaging, Persuasion and Performance.

The 10Ps are : Original 7+ Purpose, Profit and Potential

Having a keen look at these we find that most of these Ps are unnecessarily inserted.

Talk about Packaging: one can say that it is an important part for marketing. So lets see what is packaging. Packaging is important as it helps in determining how a product looks, it is important part of a product's safety and helps in pricing of a product i.e. better packaging projects elite look and thus commands greater price.

So by this we can see that Packaging is a part of product, promotion and helps in determining the 3rd P i.e. Price.

Similarly Positioning comes from all 4Ps i.e. a good product, A high priced product, a product available only on internet or a highly promoted product. All the 4Ps help determine the positioning.

Persuasion is done by Promotion, Performance is a Product attribute and Profit comes from better Pricing.

So, why did these extra Ps came into being.

The reason is simple, people view anything too narrowly and do not combine the dots i.e. when people talk about Product in 4Ps they forget about the attribute of product and how product affects performance etc.

So in order to remove the complexity and design a better marketing strategy we need only 4Ps but we need to look at these in a more holistic way than ever before.

Impact of Marketer's action on brand image

I don't know why I chose these topic for blog but today when I opened my posts I found this one to be edited. In fact nothing was written inside accept the caption i.e. "Impact of marketer's action on brand image".

So lets talk about brand image first; What is brand image?

According to http://www.allaboutbranding.com/index.lasso, Brand Image is

A unique set of associations within the minds of target customers which represent what the brand currently stands for and implies the current promise to customers. (Note that brand image is what is currently in the minds of consumers, whereas brand identity is aspirational).

So a brand image is what consumer thinks about the brand.

And what are the Marketer's action: Marketer's actions are basically any changes in the 4Ps of Marketing mix which he uses to portray a certain image of brand. But the image what a marketer tries to portray and what consumer already has can be 2 very different things.

For eg. take Pricing. A brand which has established itself in the mind of consumers as a premium brand when comes with a low price alternative, for increasing the penetration, then it starts losing its current customers too.

Also a brand which was distributed in exclusive outlets when starts selling in every outlet, it reduces the exclusivity which tarnishes its image of a high quality product.

The perfect example for the above 2 should be Levi's. when Levi's came out with the idea of distributing its jeans through retail stores like K- Mart at affordable prices, it started losing its existing customers. Also its current retail partners threatened it of dropping the brand all together. That is when Levi's had to come with Signature its low cost brand which was then distributed through K-Mart and other such outlets.

So, we can see that how marketer's action can affect a brand's image adversely. But are there any other factors which have any impact on Brand image.

The answer to the question is, YES. these factors are related to consumer himself and thus come under a separate stream called as Consumer Behavior. These factors include consumer's motivation, perception, attitude, learning behavior etc.

The example for this may be Benetton. When the company came up with ads showing people of different races and colors together to project the image of United colors, it turned out to be a blunder. The ads were heavily criticized so that the company had to go back to its earlier strategy.

Hence, we can see that marketer's action do have an impact on Brand image, and the image that marketer wants to project and the actual image can be quite different from each other. Hence it becomes duty of a marketer to think from every angle before taking any step.

Innovation, Marketing and Business

My friend had a question, innovation or imitation, what is the way to success for a country like India. I am glad that I have friends those can think out of box, can think bigger, unlike me. That was a moment when I felt extremely happy to have such a friend.
But then I thought is it so hard a question or in fact is it a question at all and if yes than why did this question came up in first place.
The answer is simple ' we just forgot simple'. Amazingly people who are good thinkers and can think out of the box have this problem. They just tend to overlook simple. That is what my friend did. He like the other creative and good thinkers tried to think of an innovative solution, but is that really needed.

Is innovation so big a deal that a country like India aces such a big question. The answer is Yes and the answer is NO. Why Yes ... i think that need not be explained but why NO, when everyone one is saying that Indians need to innovate.

The reason behind the answer is innovation does not always means creating something great, something big. Innovation can be simple as simple as the story in which a thirsty crow found out a way of getting rid of his thirst by putting stones in the pot.

That was a simple innovation, he did nothing great but found out a way to do something in different manner. See that simple innovation is.

A 5 year old kid once had this problem of hiccups all of sudden. Doctors decided to operate. When they took him to operation theater his hiccups disappeared without any treatment. When asked the Doctor said that he never had a problem. He just innovated a way to get his parent's attention. Good example of simple innovation, isn't it?

A crow from your bed time stories could do it. A 5 year old kid could do it. So why can't such simple innovation happen in business. THEY DO.

One such innovation that revolutionized business in India was introduction of shampoo sachets.

So to answer the question of innovation or imitation:

Innovation is not that big deal that India should not go for it and imitation can not survive on its own. For every product there is some or the other innovation needed to make it successful i.e.

product innovation: new product or product modification

price innovation: a new pricing startegy

place innovation : new market for the same product

promotion innovation : new strategies of promoting the same product

distribution channel innovation: the way DELL started selling laptops

process innovation: manufacturing the same product in a better way for it to become cost effective.

Without any of the above innovation no imitation can succeed. Hence even if India is imitating she needs to innovate to succeed.

So for the record; Innovation is not big deal, not for marketing not business not for life, just keep your senses intact and we together can make India the biggest innovator in world.

real estate industry

Think of the top 5 industries in terms of employement generation and you can't miss real estate. This industry has become one of the largest employement provider after Agriculture.

Not long ago this industry was overlooked by the investors, but the scenario has changed.

Investors have started taking interest in real estate industry.

Moreover, the real estate sector is also responsible for the development of over 250 ancillary industries such as cement, steel, paints etc.

A study by rating agency ICRA shows that the construction industry ranks 3rd among the 14 major sectors in terms of direct, indirect and induced effects in all sectors of the economy.

A unit increase in expenditure in this sector has a multiplier effect and the capacity to generate income as high as five times

Almost 80 per cent of real estate developed in India is residential space, the rest comprising of offices, shopping malls, hotels and hospitals.

According to the Tenth Five-Year-Plan, there is a shortage of 22.4 million dwelling units.

Not only the demand the Indian construction industry is doing good on the supply side.

Though the recent recession might make it look like a bad investment but new real estate investment funds are promising bright future.

Also despite the situation now, the demand in major cities will grow continously and with many major players from other industries entering real estate, the future of real estate seems to be bright.