Nimbooz – Ekdum Asli Indian

Nimbooz is a packaged fresh lemon juice offering from the fold of Pepsico India. It is available in three different formats – Tetra pack, Glass bottle and a plastic pack, all at very affordable rates. 

Indians, traditionally like to quench their thirst by drinking lemon juice. It is very common to notice road side vendors selling lemon juice in India during summer. Having identified this ‘Indian trait’, Pepsico has positioned Nimbooz as an ‘asli Indian drink’ i.e. a drink that is truly Indian. Naturally, all communication through ads & TV commercials try to highlight that ‘asli Indian’ aspect.

Also, Nimbooz is trying to be a substitute to the ‘unhygienic’ lemon juice sold at the road side stalls. Pepsico’s official link on Nimbooz highlights four major advantages of the brand:

• Locally relevant taste preferred by Indians over carbonated drinks
• Conveniently priced at 10 & 15 rupees
• It is available nationally, thanks to Pepsico’s robust distribution back end
• It is prepared hygienically

Nimbooz commercials, in the past have depicted situations where Indians get thirsty. They then quench their thirsts by drinking Nimbooz. Sounds simple to me and it is actually very good on Pepsico’s part to show case situations which are closer to reality for Indians.

Estimates suggest the market size of lemon juice to be twice that of carbonated drinks. Most of it is untapped and unorganized though… LMN from Parle Agro, Nimbooz from Pepsico and Minute Maid Lemon have plunged into that market. I think it is no brainer to state that all three brands will grow big in years to come.

Unconventional distribution channel for Tata Nano

I read this interesting article on how Tata Nano is trying to ramp up its sales by exploring unconventional channels like the Big Bazaar outlets. This is the first of its kind in India where a retail chain is selling a car.

The key here is to identify your target customer groups and then find ways of interacting with them through multiple touch points. Tata Nano has not been doing really very well in sales. Partly, the reason could be attributed to a lack of proper interaction with the prospective customer groups. Tata Nano customers are typically middle class people who currently use motor-cycles and they aspire to own a car. Such customers are not used to visiting showrooms and exploring options for their purchases. Potential customers for Tata Nano would actually flock the value-for-money retail outlets like Big Bazaars. They are price conscious and have to be approached in an atmosphere where they are comfortable.

I personally believe this is a masterstroke innovation in their distribution. Figures say that 450 Tata Nano cars got sold through this outlet in February, which is close to 5% of their total sales in that month. Proper push and pull mechanism can only help Tata Nano in increasing its sales.

Sales & Marketing

During interviews for marketing profiles, a candidate is very often asked to mention differences between Sales & Marketing. These two functions form the core of any business because no matter how great your products are, if you cannot reach out to your customers & make it available for them to buy, your business cannot succeed.

I remember having attended a mock interview session with one of our alumnus from a reputed FMCG company. He also asked me that clichéd question and at that time I replied, “As far as I understand, Marketing conceptualizes and Sales executes”.

Although I was conceptually confident about my answer I then found it very difficult to relate it to practicality because of my obvious lack of experience. With more than a year of experience under my belt, I feel confident about the differences between Sales & Marketing.

This post will shed some light on the differences between these two functions and their interdependencies and will also tell you why we need to have two separate functions.

For simplicity, let us imagine there is a company ABC selling product P to a distinct set of customers. M is its marketing function whereas S stands for the sales team.

What does the Marketing guy do?

I won’t go too much into what the marketing guy would do but in a nutshell, he has to come up with the right product that needs to be sold by the sales team to customers. Sounds simple eh? Well, for the marketing team, the most difficult part is to arrive at that product which fits the bill…

What I mean is that every customer has got some preferences and needs. Marketing has to create a product which caters to those needs, yet at the same time should be able to make business sense for the organization. Look at the image below…

All these bubbles represent different customer needs. The size represents potential (based on market size, future growth, internal capabilities of the organization and competition) of the opportunity. Now, marketing has to first understand those needs and then come up with suitable products catering to the same.

In this case, the ‘bubble’ colored deep orange provides us with the best potential of needs to be targeted. Once marketing identifies that ‘bubble’ (or an assortment of bubbles), then they can come up with suitable product (s).

One might wonder how some one identifies so many bubbles at the first place. I will deal with that in some other post… but if I have to state that very briefly, then I would say that market research is done to understand the needs of the customers.

So now, we have identified the relevant customer needs to be targeted and we have also created product (s) for the same… Marketing needs to make customers aware of the products that they have created.

This awareness part is very often confused with marketing. But as you would have understood from the post till now, it is only a small part of the entire activity flow. Awareness is done through a lot of media & retail activities like TV ads, newspaper campaigns, hoardings, point of purchase displays etc. It is aimed at generating interest for the product and inducing purchases.

Once customers are aware about the products and are willing to purchase your products, there is a need to make the products available for them to buy. So now marketing hands over the baton to Sales which takes care of the same…

What does the Sales guy do?

So our products are ready and customers know about them. They are willing to purchase from those goods… We need to make sure that they are available at desired retail outlets. The entire process of making our goods available at desired retail outlets comprises of sales.

Typically a sales guy would be responsible for pushing sales… So how does he do that? As would be clear from the process flow shown above, there are a lot of stages where intervention would be required so as to ensure smooth flow of goods from the manufacturing unit to the end customer. Say for example, the company needs to ensure that manufactured goods (produced as per demand) reach the depots (a.k.a C&F agents) which in turn forward the same to wholesalers. Depots typically are company owned so a sales guy does not have to ‘push’ his products to a depot. But, when the goods are sent from the depot to a wholesaler, the role of the sales guy becomes very crucial. Orders are booked at the wholesaler’s place. The wholesaler has options of buying goods from other companies as well. So the sales guy’s relationship with the wholesaler and his ability to convince (selling skills) will come to the fore and create a difference at this stage. Also, you would understand that the wholesaler’s decision to purchase goods will also depend on the demand existing in the market. So there is a big correlation between sales and marketing as is evident here. Marketing should be able to create the much needed awareness so that Sales team can easily sell your goods.

The job of a sales guy does not stop here… Any successful sales & marketing organization involves its sales force in a lot of decision making rather than making them to simply push for sales. For any marketing guy sitting in the Head Office, it is important for him to understand the ground realities. He can understand a lot about his customers when he interacts with the sales force. The reason being that the sales force is closer to the ground and faces the day-to-day issues. They are supposed to understand the customers better and come up with learnings, transfer the same onto the marketing fields so that they can design better products & services for customers.

Why are these two functions different?

You might wonder what is the need to have two different divisions when they are so inter-related? It is a very valid question but I believe it is possible to have the same person dealing with both the functions only when the scale of operations is small… When it is big, it is practically impossible for some one to handle both the functions.

Apart from that, sometimes, it is better to have two different people (or teams) dealing with it because of the nature of activities. A marketing guy should ideally be concerned about creating innovative products & services and devote maximum time to do that. Whereas a sales guy should deal with selling the goods… handle his sales force… be an administrative manager and lead to maximum sales.

Also, too much of field knowledge will inhibit innovations for the marketing guy… Say for example, a field guy who is too bothered about the practicalities of the field may not be able to make his creative juices flow which might hamper innovations… This does not mean that marketing should come up with a random product which is not practically sellable… Ideas should be generated in a free flowing manner… Ratification of the same can be done at a later stage… and the Sales force can play an active role in ratifying the idea(s)…

Conclusion

Sales and marketing are very much interrelated. In essence, they are actually like the two main pillars of any successful organization. Every company has to sell to make its living and S&M does that… in an effective manner. This does not deride the fact that other functions are also important… They are but if you think about making money, then eventually you have to look at creating value and that has to be done by the S&M guys.

Do post your comments… I would love to have some discussion/ clarify doubts.

What is marketing?

In a ‘plain vanilla’ world full of austerity, marketing would have had no importance. Fortunately, not many of us follow a hermit’s way of life. We have desires and the ability to find ways of satiating them. These desires or needs form the core of marketing.

Going by the conventional definition, “Marketing is a process of satisfying the needs of consumers”. Sounds pretty simple right…? But guaranteeing that ‘satisfaction’ is not easy.

The entire process of  “knowing what consumers want, why they want it, how they want it, creating what they want, communicating that we are going to give them what they want, delivering it and then asking whether they have got what they wanted or not” is what marketing is. People very often relate advertising/ media activities to marketing… which actually comprise only the tip of the iceberg.

Importance of marketing stems from the fact that consumers have a lot of needs and many of them are unmet. Some of them are known and many are unknown. Those unknown ones are very often called latent needs. A latent need is something which the consumer himself is not really aware of. He is not sure of what he wants but he knows that there is something which is missing. E.g. Before online travel sites came into being; people always felt the need to have a one stop shop for buying tickets and planning their holidays. Some entrepreneurs realized that need and created the likes of Yatra.com, Makemytrip.com etc.

Sometimes marketers also have to create needs, which are altogether unknown. Consumers probably never thought they would require a particular thing until some one comes up with the idea. E.g. A sensor, put inside a Nike built-in pocket, specifically designed for it under the insole is an example of ‘need getting created’. The sensor is connected to the iPod device which tracks the jogger and sends data onto it. It can tell about the calories burnt, distance covered, pace etc.

The duty of a shrewd marketer is to understand the needs (including the subtle ones) and cater to the same. He can gauge those needs by observation, experience, consumer surveys or by using some scientific market research techniques.

If some one knows about the unmet needs of consumers, he can create product (s) which would fit those needs. It can be a website portal or an electronic gadget or a service. Kaya Clinics launched by Marico would be a good example of services.

Once he is sure of the product, he has to make it affordable to the consumers. So depending on the size of the market and the existing demand, he has to price it. Usually, a mass product is priced less whereas premium products are priced on the higher side. This, though, is not an absolute rule… Depending on other factors like demand/supply and bargaining power of the manufacturer, a product can be suitably priced. E.g. Nokia has products which are priced very minimally starting from a few thousand bucks to more than a lac. The low cost Nokia phones are aimed at the mass market which cannot afford very costly products. Whereas, a high end Nokia smart phone which has every new technology incorporated in it, is usually priced higher and targets a smaller segment of the market.

When he has a product and its price, the marketer needs to let the world know about it. This is where he needs to do promotion for his product. It may include media campaigns, TV commercials, radio jingles, online viral campaigns etc. on one side and trade margins and push at the retailer level on the other side. This act of promotion will help the consumers & customers know about the product and will help them in taking a conscious decision regarding whether to go for it or not.

Once promotion does enough ground work towards creation of demand in the market, customers will come seeking your product. This is where the significance of place comes into picture. The product has to be placed at the right place at the right time. It should not happen that a customer comes to buy your product and he does not find it in the shop. That will affect the brand image of the company and the product negatively. In simple words, the marketer has to decide where to sell his products from: whether he wants only supermarkets to sell it or should the unorganized sector go for it or is there a need for an exclusive retail chain dedicated to the product – this decision lies with the marketer and his judgments. Also, he has to ensure that the product reaches the desired outlet at the correct time. All the processes involved starting from sourcing to delivery fall under ‘place’.

Product, Price, Promotion and Place, highlighted in the paragraphs above together comprise what is called the 4Ps of marketing or the marketing mix.

Before I go ahead, there is one point that I need to clarify here: the difference between a consumer and a customer. A customer is some one who takes the decision of buying something. He has the monetary ability or the authority to buy a product. This definition is subjective and relative. For a manufacturer, the wholesaler can be a customer. For a wholesaler, the retailer can be the customer. For a retailer, the person who decides to buy the product is a customer. On the other hand, a consumer is some one who actually uses your product.

A very simple example would be: A mother decides to buy Johnson’s baby powder for her one year old baby. She is the customer and the baby is the consumer, the one who uses it. Sometimes, the customer can also be a consumer. E.g. For a retailer, the same person who takes the decision of buying a toothpaste (customer) also uses it (consumer).There can be other permutations & combination of this difference but the basic difference is the same.

Finally, just to touch upon another important aspect of the marketing, I would like to introduce STP a.k.a Segmentation, Targeting & Positioning. In very simple lay man terms, segmentation is the division of total universe of consumers into homogeneous groups, based on different criteria like: sex, age, region, race, education level etc. This division can be on the basis of one or a group of these factors. Once the segmentation is done, one or multiple groups are chosen and targeted based on the features of the product. Then, using media campaigns or other promotional techniques, an image is created in the minds of the targeted consumers about the product, which is called positioning.

Let us take an example: Many of us would have heard about the brand Saffola. For some one to buy it, the customer has to have a desired income level, he should be wary of (or is suffering from) lifestyle related stress & diseases and should also belong to a particular age group. So Saffola, in this case, segmented the market on the basis of income levels, age, lifestyle, jobs, education etc. and decided to target one particular set of consumers. Once the target group was selected, all that was left was to position the brand. All communications (including TV commercials, print ads etc.) showed a wife who is wary of her husband’s lifestyle related problems and so she takes a conscious decision of buying Saffola which would help her in keeping her husband healthy. These communications have been successful in creating a caring, healthy and safe image of the brand Saffola. This is positioning. It is the image of the brand or the product, created in the minds of consumers, thanks to promotional efforts. Positioning is what the brand/product stands for.

So, this brings us to the end of the first post on marketing… I only tried to define what it is, in very simple terms. I will try to come up with my thoughts or views on a lot of other topics pertaining to marketing.  All criticims and discussions are welcome. Happy reading .

Marketing – straight from the heart!

More often than not, I get asked, “What is marketing? Why did you choose Marketing as your specialization during MBA? What is the difference between Sales & Marketing? Why do you like the subject so much?…”

To deal with all those questions as well as to satiate my inner desire of learning more about this beautiful field, I have started this blog. I hope to keep this site up & running for as long as I can. I also intend to keep the content of this blog very plain & simple and look at marketing from my own eyes. Marketing as a field is very subjective… Every other person can have his views or perspectives on issues related to marketing. This blog will reflect my views on marketing, albeit with a tinge of intelligence and background research.

Marketing has a lot of theory in it like any other science. But what makes it interesting is the practical aspect of it. There is no clear cut formula of success in marketing… It is a very dynamic field and it is changing as I am writing this post. A successful strategy in one market does not assure you of success in another. A media launch which was boasted to be the greatest success of all time in one part of the world could just manage to create a few ripples in another. Therefore a successful marketeer has to be a keen observant because he should always keep a tab of the changing preferences of his consumers/customers. Similarly, he should always be eager to learn, unlearn & relearn.

I hope my posts would come handy to people who like this field. I would always be welcome to criticisms, suggestions and healthy discussions… Will come up with my post on the topic ‘Marketing’ itself very soon.Till then… Bbye.