Coke at the end of India

It is a common mistake to equate marketing with advertising. Marketing is not just advertising, although that's one important component. Decades ago, a marketing guru defined the 4Ps of marketing - Product, price, place and promotion. In countries like India, its often distribution (place) that is the key to a business success. Getting your product to every one of the 5 million or so outlets is a monumental task, but is often the key to success. Nobody does this better than Coca Cola.

I am hardly the first person to marvel at Coke's distribution capability all around the world. Melinda Gates, for example, did it in one of the TED talks - What non profits can learn from Coca Cola. It was a brave talk - the not for profit sector often derides and holds in contempt the corporate sector. But you can't run away from the lessons that Melinda Gates draws from Coke.

Consider this

The place is Dhanushkodi, almost the very tip of India - well past Rameshwaram. Its virtually an abandoned place. Almost nobody lives here. You have to drive by a 4 wheel drive across the sands of the sea to reach there.  There is no electricity, no road, no buildings, no nothing. But a few hardy souls go there, some as pilgrims, some as tourists. And what awaits them is a shop that sells Coke. There is nothing else. You can't even get a cup of tea. But you can get a Coke.

For a fascinating account of the history of Dhanushkodi go here - its a lovely post from a fellow blogger who often comments here. It was her post that prompted me to actually go to Dhanushkodi.

About 200 hardy fisherfolk live there now. All in thatched huts on the sands. Its a hard life , for other than the catch of the sea they have to trek 20 kms across wet sand to reach anywhere or buy anything. The memory of the 1964 cyclone that destroyed the town is everywhere - see the remnants of railway station of that time.

But in the midst of this desolation, there is one sight that warms the heart - in many ways it foretells the future of India. There is only one pucca building in this place.

Its a school !

Coffee, wine or me

Remember the old book series "Coffee Tea or Me" - well readers of this blog are probably too young to remember it. Maybe now its time for Coffee, Wine or me !

Why does a coffee chain want to serve alcohol ? Starbucks wants to try out having wine and beer on its menu in a few outlets in Seattle and Portland. At first sight it seems an odd combination. Why would Starbucks want to do that ??

The problem, as always, is growth. Starbucks hit a rough patch, if you remember, in 2008 which prompted the founder Howard Schultz to retake the reins as CEO. Currently it is doing well. Revenues in 2011 grew 9.3%. But how do you keep on growing the revenues. After all, how much more coffee can you stimulate your patrons to have. You  can push the "eats", but that's a limited range. They are trying to enhance that with an offering of " premium foods" - whatever that means. And now alcohol.

But is Starbucks a bar ? No serious drinker will go to Starbucks for a pint or two. So the only opportunity is to attract a a mixed group of whom some want a cup of coffee and some want a glass of wine. How much is that opportunity ? Can't be really a growth driver. And what would happen to the brand - Starbucks is synonymous with coffee now. You want to dilute that ?

Of course the company is no fool. Its dotted with marketing types spewing Kotlerspeak. The trouble is that marketing types are often wrong. For the moment, Starbucks is only testing. If the test bombs - they'll quietly bury the idea.

An obvious avenue for growth is geography. Expand overseas - Starbucks is pretty much ubiquitous in America. Go abroad. Especially to magnetic China. They have actually started to become quite widespread in Chinese cities. China is a tea drinking country, but there are enough youngsters willing to swill coffee. Especially an American brand which carries a halo in that country. But the problem is that the Starbucks formula in the US is a disaster in China - free wifi, stay as long as you want ..... That's taken literally in China and giggling girls , four of whom sharing a cup, sit there all day. I hated going to a Starbucks outlet in China simply because I could never find a seat as "long term residents" had made themselves comfortable everywhere. Instead when I wanted a coffee I went to McDonald's where the coffee was superb , they served it within 20 seconds, and I could find a place to rest my bum - all at half the price of Starbucks. Screw the ambiance - the taste of great coffee drowned everything else. Global formulas don't always work.

So Coffee Wine or me ? I would stay with the coffee, thank you.

Why this kolaveri di

The title of the post is simply to substantiate to Gils , Zeno and other  experts that I am "tuned in" ! In case you are still flummoxed, then that is clear proof that you simply aren't up to date with the "in thing" !! Why this kolaveri di is a completely nonsensical song that for reasons totally baffling has become a massive rage and has gone viral in the last four days. Since world success these days is measured in terms of number of views in YouTube (1.8 million in 4 days and rising by the minute) and insane numbers of Tweets,  Facebook mentions and likes ; it can be conclusively established as a massive hit. I am reliably told that it is competing with another equally baffling entity called Lady Gaga for global leadership.

The song is in "Tanglish" - the curious mixture of Tamil and English which is widely spoken in Madras. It is from a forthcoming movie called 3 (zero marks for creativity in naming a movie). The lyrics are complete nonsense and there is virtually no reason why it should appeal to anybody. And yet it is a hit in four days. WHY ????

This is the mystery of success in consumer marketing. No amount of consumer insight or market research will tell you why something will succeed while a similar thing bombs. The consumer continues to be an indescribable mystery. Many pundits will write treatises on why it succeeded, but after the event. Only a rare genius such as Steve Jobs, could confidently predict success, and get it right. That's why he is so highly feted.

Can anybody tell me why Justin Bieber's Baby should have more than half a billion views on YouTube (the kid can't sing for Gods sake).  And why Charlie Bit my Finger was long reining as the top watched video of all time and even now is a respectable 6th with some 400 million views. Or for that matter, why a yucky tasting syrup, developed as a patented quack medicine for  morphine addiction, dyspepsia and impotence should become the largest consumed drink in the world for 100 years.

Who can fathom the mind of Rajalakshmi, Wang Xiao or Jane Doe ?

We are a funny lot

Consumer behaviour is so complex that nobody really understands it. That's why there's a massive and flourishing market research industry to try and fathom this mysterious creature called you and me. Perhaps this is not so mysterious - after all the consumer is usually referred to as "she" instead of "he". And who can claim to fathom the mystery of the female of the species .......

Take the case of consumer behaviour in relation to plastic bags. When I first went to Guangzhou, I did the usual thing - go to a supermarket, buy tons of stuff you don't really need and cart it away in about 27 plastic bags . Since there are a lot of people in China and a lot of supermarkets, this translated into zillions of plastic bags let loose on the environment. Bad. Campaigns to "save the planet" yielded zero results. Mrs Li continued to merrily buy every kind of meat imaginable and carry them away in plastic bags.

The Guangzhou municipality hit upon a brainwave. Instead of banning plastic bags outright, as governments are wont to do, they simply decreed that shops must charge 20 jiao (or cents/paise) for every bag that the consumer wants. You would have thought that Mrs Li wouldn't care less - she's after all buying some 500 yuan worth of stuff. But no; much to everybody's surprise Mrs Li decided that she must contribute to saving the planet after all. She decided to bring her own bag to carry the groceries home . Lo and behold - plastic bag consumption fell by about 80%. You could still get one for convenience if you wanted, by paying 20 jiao, but you could also feel good about being responsible with the environment and bring your own bags. Great. Perfect mix of convenience and responsibility.

But then the same Mrs Li carries an umbrella - you see, it drizzles in Guangzhou virtually every day. And in front of the same supermarket which is shouting hoarse about saving the environment, there stands a pretty security lady who's wrapping your wet umbrella in a polyurethane cover so that the water does not drip in the shop. These are the extremely thin types - virtually no reuse potential at all and they are simply chucked. So zillions of plastic bags find their way into the waste dumps after all.

Why I write about this, is my experience being back home. There's no such rule in Bangalore; so our own Rajalakshmi merrily goes about filling plastic bags in the shop. This being India, and she being, shall we say, rather generously proportioned, there's more food to be bought !! So instead of the 27 plastic bags of Mrs Li, Rajalakshmi fills up 34 bags. And weightlifting not being her forte (in fact nothing remotely athletic being her cup of tea), she gets the shop to deliver this mountain to her home. Bangalore, with a questionable garbage disposal system, is literally choking under the weight of the plastic bags that its coders generate.

This blogger is of the view that he must make a small contribution - so he carries along his jholna bag (rather goes with the non corporate image being furiously cultivated). Try entering an Indian shop with a bag - you are branded a thief unless you can prove innocence; so stealing aids such as bags have to be strictly deposited outside. Attempts to explain green logic to Mr Bahadur Thapa standing at the entrance evokes total non comprehension. And even if you get past Mr Thapa, the checkout insists on putting the stuff into a plastic bag and then very helpfully placing it into my jholna. Environment be damned.

So what will work in Bangalore ? To make Rajalakshmi bring her own bags ?? Even if you are a genius in fathoming the minds of a consumer in other parts of the world, I bet you stand no chance with Rajalakshmi. So nothing short of a completely whacky idea will work. Readers are invited to contribute. Mine is to get some sundry frauds masquerading as god men to issue an edict that plastic bags from supermarkets are likely to result in arthritis of your small toe. The more illogical, the better - if its issued by a so called god man, it will be implicitly believed as gospel truth. Then maybe we can save Bangalore from being choked to death.

Marketing 101 from Apple

If you’ve been within 100 miles of any business school, you have , no doubt, memorised from cover to cover, all the pages of Marketing Management by Philip Kotler. A doyen of marketing, Kotler is the S.C. Johnson & Son Distinguished Professor of International Marketing at the Kellogg School of Management . His work was the standard text book 30 years ago, and still is.

Many marketing hotshots are educated on his concepts and then blithely spend a lifetime ignoring it. Make a shoddy product, charge the moon for it, pour a fortune down the drain in advertising and then wonder why the product isn’t selling ! The zillions of dollars sloshing around the advertising industry is testament to this “Marketing Myopia”, to borrow a phrase from another seminal piece by Ted Levitt from a few decades ago.

One shining exception to this is Apple. They anticipate (and sometimes even create) consumer needs and meet it brilliantly. To hell with all the rest. Take the case of the iPhone. Absolutely brilliant product. But remember the awful contract with AT&T they forced American consumers into. Remember the small fortune it costs to buy one. Remember the shameful “pajama string” that goes for the cable (really what an abomination that is). Remember even now, you have to wait to get one and not just buy it off any shelf. And yet what happens to sales ? They just announced yesterday that iPhone sales grew by a measly 100% ! And what do they splurge on advertising ? Zilch.

Witness the virtual religious fervour over the event Apple has scheduled for Wednesday. It is hotly rumoured that we are going to see the unveiling of the iSlate or iPad, or whatever its going to be called. They have virtually the whole world drooling in anticipation. Huge secrecy (they have obviously never heard of Market Research), with well planted leaks to titillate. Simply brilliant. They have the whole world standing in a line waiting to see it. No prices for guessing how much they have spent on advertising to achieve such consumer interest.

How do they do it ? Simple. By focusing on getting a product that’s so outstanding that it needs nothing else. The iPod and iPhone together with iTunes and the Apps Store all fall into this category. Just one focus. Get a product that fills a consumer need , with a consumer experience that’s out of this world. Get the product right. Get the product right. Once more. Get the product right. And some more.

Methinks whoever invented the 4Ps of marketing did a disservice. The worthy should have nominated one P with capital letters and 3 small ps besides it. Actually marketing pundits have got this well understood. The trouble is they have got the wrong P in capital letters !

I suppose its only a coincidence that some of Apple’s blockbusters have got one capital P in its name – iPod, iPhone ……