The Maggi Noodles controversy 2015

The Maggi Fiasco 2015

 Today the entire country is talking about how an MNC brand can break the trust of a nation by dishing out a product which isnt good for health. And the media played a pivotal role in blowing things out of proportion by writing on the issue again and again so that they have a variety of content in their mediums.

Yes today the world has become health conscious but most Indians, I believe try to blindly follow the western lifestyle. Our health ministry has just found out that a product as big as Maggi that generates 180 Cr every month from its sales has got excess lead in some reports and presence of MSG in some reports. The brand has been operational in India since donkeys years and every Indian would have eaten Maggi at some point in their life. And even today despite news of Maggi having harmful elements in the pack I saw a mother buying Maggi noodles for his kid at a nearby local store. This is despite an argment she was having with her kid that Maggi is bad for him and to that the son replied "Then why did you give me this bad Maggi for all these years?"

And to add to this, FDA has found an issue in one of the Maggi batch, have they monitored the other brands on the same scale during this testing and shown their results, it would have been really interesting to see other brands like Knorr, Top Ramen, Sunfeast, Nissin, etc also fared. Leave apart the branded players today we have so many local brands and semi branded (brands of hyper markets) available in the market at cheaper prices, I would definitely like to know their test results. Our countrymen have been eating all these local and branded products for ages and no testing results ever emerge. Just because its an MNC and everyone has jumped on it, imagine an Indian company doing this and the perception will be "Its expected".

Anyway by creating this massive event I am sure all the media will be extremely happy as now its expected that Nestle will not let its bread and butter brand go down. And soon there will be a mammoth media burst to clear their name with a brand new TVC with a extremely trusted celebrity, big print ads, hoardings all across and flooding the digital medium via blogs, videos showcasing how maggi is made and care about everyone health, etc will be showcased. So its cashing in time for all the media houses, hopefully this yr targets will also be upped for all of them.

Was googling about Maggi and it threw financial results for the yr for Maggi which is some 7% down from last yr and market cap falling by INR 10k Cr as per ET in a weeks time. We should also expect Maggi share to come down and competition enjoying the surge in their shares without spending a penny.

A couple of years back Cadbury also encountered a similar issue with worms found in their chocolates and they took a 30% decline in sales in that year but then they quickly recovered. They quickly release a report saying nothing wrong with manufacturing and it was a storage issue and diverted the problem and started project Vishwas (reassuring the consumer that Cadbury is still the best and does not have worms). And to cover up their storage they strengthened the packaging and restoring consumer confidence.

Similarly Nestle with Maggi will also have to adopt a strategy where yes first they accept that there was a lapse and they are willing to improve their age old product by adding some healthy ingredients and importantly strengthening their packaging to ensure the shelf life increases. Start a project which will help rebuild image of Maggi by getting a trusted face and burn millions in media. Apart from this hygiene what would work the best for them is to have live feed of their manufacturing facilities for a while and their testing protocols to be made more stringent. Create an AV showcasing the journey of Maggi since its started and how it won the customers over what people loved about Maggi by re-igniting their emotional passion for the brand.

So basically this fiasco means :
- More money for media companies
- Volatility in the stock market
- Increased market share for competition
- Brand revamp for Maggi (new Maggi would be a more modern and a healthy version)

Personally I am more keen on the last one as I look forward to a more modern Maggi in terms of imagery and an enhanced product portfolio.

Online v/s Offline Marketing

Online vs Offline Marketing

 

 
I know its a little too late for this discussion but still the I think both these mediums have their place in most markets especially developing countries, even in developed markets both these mediums are used but their role in marketing changes. For e.g. offline marketing is no longer the lead awareness medium but a support medium or a reminder medium in developed countries whereas in developing markets offline is still the lead awareness medium (in terms of reach).

In developing markets like even the BRIC countries offline spends are still much higher and it continues to be the lead awareness medium although spends on online have increased tremendously over the last few yrs. Online in these markets is more of a engagement and lead capturing source rather than awareness medium.

Today only 2 nations North America and West Europe have internet penetration of 80+% and South Asia has only 19% penetration which makes it extremely difficult to have one global marketing plan since mediums in both these nations vary significantly. But since the population in Asian region is much higher in absolute numbers it makes sense to explore the online side despite the penetration being low. The global average for internet penetration is 42% so countries with lower penetration the marketing strategy to use this medium will have a different role.
Source : InternetLiveStats Q1 2015, InternetWorldStats Q1 2015. Wikipedia for population data

That being said one can not ignore the potential of the new medium (online) as its the future and I guess the marketing gurus have given their stamp of it being the star in the future. But its taken decades for the developed markets to master it and take the best out of this medium and the developing counterparts see this as a replicate model and try everything that their developed allies have done. Not knowing that its taken them years to master and juice out of the maximum of this medium as there is a lot of learning's that come only out of experience.

There are so many options available to explore on the online platform and one is really spoilt for choice here especially if one is from the developing nations its a 7 course meal after being hungry for ages so one wouldn't know where to start so one hogs on everything and ends up not eating whats best for him. For e.g. first step is to ensure that the landing pages and all the material which is in the organizations control have to be made the best before doing any other online marketing but here typically organizations would start everything together a brand new HTML 5 website, SEO, SEM, Search, Display Networks, Banners, Mailers, Whatsapp, etc and then websites don't function or tracking is faulty and they end up messing up the entire medium. This is because the their core TG may not be ready for such kind of online marketing explosion. Recently in India there is again a online retailer dotcom bubble being formed but its not that they are spending million of dollars online they are spending major part of their budget offline to generate awareness of an online medium.. In developed nations this would seem like a silly and illogical idea where a manager will be asked the question of why should I spend dollars offline when the medium is online and high internet presence.

Just by taking an agency who is willing to give the best the world has to offer does not mean its the most intelligent piece of marketing one has ever done. Its really important to understand the dynamics of the country and its population and then dish out marketing strategies that will help deliver the desired results. For e.g. mobile as a medium has almost 75% + penetration in Indian markets but only 10% + mobile connections have a high speed 3G connection in India. So here if we had apps or content that is heavy on bandwidth then your definitely losing out on our TG unless your TG is premium kinds.

Hence its imperative for brands and organization to have accurate understanding of their markets and their TG before crafting out global best practices that may not be relevant for their markets. In most developing nations offline still is seen and will continue to be the lead awareness medium as of now I feel and probably in the next decade when these countries have better infra this medium will or may become the lead medium for awareness as well as engagement.

That being said a good marketing strategy will always have both these mediums as their must haves its just that the roles of both mediums will change depending on the geography and TG of the brand.

Evolution of Marketing

All of this started during the pre-industrial revolution during the 18th century where everything was hand-made and was made to order. Barter of goods and services was the way, trade operated in those times. This was known as the trade era where traders had an upper hand in selling stuff for a margin in terms of getting upgraded products/services in return for their offerings.

Then came the production era where mass production was the name of the game. One size fits all was thought that all believed in and the belief that “people buy what we make”, it worked well especially considering that there was no or extremely limited competition. This era lasted from industrial revolution from 1860’s to early 19th century.

Following the production era was the era where sales played a pivotal role in the industry forming it the sales era. Due to the mass production markets got saturated which resulted in product demand plummet. More and more companies entered into the production era and commoditized the market making it difficult for the companies to sell their products as there was hardly any differentiation. Pricing played a pivotal role in convincing the consumers to buy products from a particular manufacturer. This era lasted till the middle of 19th century.

After sales era there was dire need for the companies to give the consumers products that they needed rather than what they could make. This innate need started the era of marketing where companies realized that consumers now had multiple options and they would need to differentiate their products from other manufacturers. In other words real branding started emerging during this phase where all companies started targeting certain segments in the society to ensure that they catered needs of that particular segment through their product/services. Later on during the same era customization also played a key role and changed the way companies made products. Businesses existed because they fulfilled some unmet consumer need, and they realized that consumer is now the king who needs to be served with what he wants and how he wants.

And today in the marketing era the role of digital marketing is not just a fad but whole new way of reaching and engaging consumers. A couple of years back, large companies mandated the use of this medium and allocated specific budget like 10% of the total media spends have to be on digital but today, the medium has not just proved itself but redefined how marketing has to be done. I would say it has enabled marketers to achieve individual marketing rather than segment/mass marketing. With the help of tools made by companies/brands like Google, FB, etc it has enabled marketers to market their products and services to an extremely specific set of people which is the IDEAL TG. Products and services are now being launched online and that launch has a much better impact / result as compared to traditional launch since it reaches the right audience, in time and is completely measurable. A simple e.g. to showcase importance of this medium is to see any established company today when they dish out a role for a brand manager / marketing manager it has a mention of a particular skill-set i.e. Digital Marketing.

I think the future of marketing will be something where consumers will try and create products themselves by just customizing everything. Depending on he consumer preferences which is tracked by Google and many other companies marketers could show them creatives that they are more likely to get influenced from. Although this may be an expensive proposition of creating multiple edits but if we look at the end result I think the effort will really lend value as it will generate higher sales.

Your True Brand Ambassador - An Awesome Product

Millions of products in the market but not everything sells like hot cakes. There could be many reasons for the sales of these products to not happen

- Bad Marketing

- Bad Product

- Bad Distribution

- Bad Positioning

- Wrong Market

- Wrong TG

And the list can go on and on......

But there are certain brands where people await the launch of new products, stand in long ques or book the product well in advance to get their hands on the same. Companies or brands like Apple, Harley Davidson, Ikea, WV Beetle, etc are not just known for the latest offering but most people can remember what they started with and what is their current offering. Now think the same about say for e.g. a Samsung who is competing with Apple for the best smart phone, what was the first product they launched, some of us would know but a lot of consumers will not be aware of their first product.  

One thing the emerges common among most cult brands is that they have a product which is just awesome. Everything that is put in the product has a purpose and more importantly that same purpose is something that the consumer also relates to and finds its beneficial. Their products are so well made that just a PR leak of they are coming up with a new variant is enough to generate tremendous buzz in the market.

So I guess for me the learning is that if you wanna create a brand / product line which yields revenue over a longer run invest in the product do not leave behind anything to ensure that its the best in class product. Yes there are pressures on budget and this may sound idealistic but ultimately in the market the brand / product pays the price for not being the best. All the other elements like the distribution, marketing mix, etc can be played around but once a product fails its really difficult to make it a success.

Often hear from people that these bigger organizations have lots of money to waste on R&D and MR but ultimately that same research helps to narrow down the likely list of successful products rather than launching products and failing in market. 

Super Brands

Everyone aspires to own premium brands even though when they know that the product on offer is either almost same or at times exactly the same. Was just going through some videos on TED Talks and found very interesting trend that was coming up which is how great brands drive certain kind of behavior or in some cases change consumer behavior.





Some brands have the power to make a difference in consumers life and powerful brands are able to change the way consumers feel, think, and act. They do this when they become part of peoples’ lives by answering the simple problems through their products and services.

There are certain brands that have changed the behavior of consumers and those are brands that are your evergreen brands since they are the strongest at the conviction level. For e.g. brands that changed the way we shop (Amazon, eBay), how we work (Microsoft) and how we access information across anything and everything (Google) basically these brands identified areas and changed the way consumers behaved.

So why do you think these brands did so well or What do these great brands have in common that makes them not just successful but successful over a period of time: zeal to understand latent consumer needs and create them into consumable products and services. It’s an extremely simple concept but not all companies follow this which bring their downfall.

The WHY of any Brand

There are a lot of brands successful and still going strong (cult brands) and then there were some strong brands then but now are either shut or struggling. So how can a brand falter so much when once it was a strong dominant market leader and now a struggling or a bankrupt brand today. How can something go so wrong that it results in well oiled money-making machine going bust. The most common top of mind answers would be – change in strategy, sub-optimal resources, faulty marketing, inefficient sales, etc. But do you think these are the real reasons since all of these could have been changed back to the original ones and the brand would have been back on track.



So what happened to make it that irreversible change? I feel that the most important thing for any organization is not ‘what’ they are doing or ‘how’ they are doing but it’s the 'WHY' they are doing is the most important thing. The What & How are things like marketing, positioning, strategy which are easily changeable but the moment you change the WHY, which the reason for the brand’s existence then its a serious and a fatal problem.

A brand is started with an end goal in mind which is the WHY and unless the why is clear none of what and how elements make any sense. So if the purpose of a brand changes it is very difficult for a consumer to digest a fact that a brand supplying computers is now making phones hence the belief on the brand is low. Yes companies do go into newer territories to ensure growth objectives are met but then it’s what the company stakeholders want and not what the consumers want.

Just to give an e.g. today radio transistors aren't something you see but idea of a radio was to entertain so the next logical upgrade for a RT brand is to get into an innovation mode and figure the next mode of innovation like a walk-man or stereo system when they hit the wall in terms of sales. But if a brand got into something like computers which was at that time meant to be the next big thing although logically it made sense to move from transistors to transponders/semi conductors but the mission of the company changed from providing entertainment to easy computing. This is where they go bust.

And if you look at successful brands like Harley Davidson they never change their mission (why) "We fulfill dreams through the experience of motorcycling, by providing to motorcyclist and to the general public an expanding line of motorcycles and branded products and services in selected market segments." and continue to have all new products, communication and all activities that glorifies the WHY of their brand.

Just feel that it’s important for a brand to stand true to its mission and tweak the vision if at all need be to be successful in the long run.

 

Differentiate your brand

The most common word used across the marketing and branding forums and people is that "is your brand/activity differentiated enough to grab the consumers attention?"

And most managers would answer yes it definitely is different from what competition is doing, but is it really different? The answer is most probably no. The differentiating factor  is  most probably that none of the competition has tried it but today differentiation is more than just about your category it's across brands.

Imagine a testimonial ad started by a FMCG category which worked well and this same idea was then taken by the agency to another category like an automobile or pharma and pitched as first in the category. Everyone in the room is happy since they achieved one thing in the meeting which is we are different from competition, but are they really different? From a consumers lens he would feel I have seen this many a times and all of them including other categories are giving the same message.

Creating a differentiation for me is doing exactly opposite of what conventionally marketeers are doing for e.g. when a service provider blocks the sale of the product or limits the consumption of their product or service immediately it becomes a big thing. Consumers start getting impatient as to what is this product all about or why can't I get it. This ultimately results in massive awareness which is consumer-led rather than manufacturer led.



The above e.g. is a marketing strategy that is different but apart from strategy there are there ways of differentiating as well which could be via creative communication (e.g.Got Milk campaign), using different media (e.g. Ford for the launch of Fiesta in India during cricket matches), operational differentiation (e.g. Walmart's procurement and supply chain management), different business model (e.g. Amway, etc).

The above are just e.g. and current trend could be different but the idea is to ensure that differentiation should happen across categories and not just within a particular subset.

Advertising in particular works

Advertisers crave to get captive audience so they can brainwash them and put their brand messages in their heads. To get this captive audience they would got to any length but today the consumers are exposed to so many messages during a day that they would tune out of certain experiences even if they like it.

Take any medium today, the consumers are given an option to escape from this, in a TV by skipping to other channels, skip the ad in YouTube, FB asking for permissions, tv channels now promoting 1 break program, etc. All moving to give the consumer the much-needed space.

In a way, this reinforces the definition of ads as unwanted interruptions. For e.g. at YouTube they put a forced 5 sec ad viewing but then skip the ad to go past it. The other way to look at it is that challenges the advertisers to create fantastic ads so that people choose to watch them.

I guess the more generic the ad is, it is less likely to get any attention or stick-ability. I read somewhere that "People hate advertising in general, but they love advertising in particular”.

All marketeers love to get new mediums/channels where they can get a set of their captive consumers but do not pay equal attention to the kind of messaging/creative they want to put in those mediums. Where everything in marketing is measured any creative messaging how much ever you test or try to understand will always remain subjective. Companies spend millions of dollars testing communication still aren't able to crack and get the desired response but at least they are close to what they want to achieve. But there are certain companies who go with the gut feel execute campaigns online and offline and clearly when the consumer has his first look their first thought would be "what the hell are they trying to say with this one?"

No wonder most of the marketing dollars spent are in vain and then the conclusion is always that strategies were either not planned properly or executed properly.

Just feel that out of the box thinking should not only be applicable to mediums but also to the messaging that goes out in those mediums.

Marketing V/S Branding

Tricky question for most, but the answer to this question of how marketing is different from branding and vice versa is that for most people both are one and the same.

But I think the answer lies in both the terms itself. Just remove the last 3 letters from both words (ing) and think for a minute what both words stand for .......

Am sure you would have guessed the answers by now....

In my view a market is full of brands (branded products) and unbranded products but a brand is a distinct individual identity in market. Marketing makes brands which means brands are derived from marketing. A lot of established and well to do companies have designations of brand managers and marketing managers but in reality there is negligible difference in both roles.

A role of a marketing manager is much richer as compared to brand manager but still people take pride in saying I am a brand manager as compared to a marketing manager..

Marketing has a different meaning across different companies

Ever wondered what marketing truly means?

As per the marketing guru Philip Kotler marketing means "Marketing is the set of human activities directed at facilitating and consummating exchanges." But the meaning of the same term when you see or experience in real life becomes extremely different and unheard of.

Each organisation across continents has made their own definition of this term. This term also changes with change in leadership of the organisation or it may also change with change in business strategy.

I have had experience in working in a global MNC FMCG company, an owner driven company and a public limited company and all these 3 companies have taught me different meanings of the same term marketing.

A truly global MNC FMCG will make you feel that marketing is a science that is cold and calculative where everything is measured. Marketing in this kind of an organisation is the driving force behind the organisation and takes lead in all activities.

In contrast an owner driven organisation the meaning of this term changes dramatically as the owner believes that he knows his customer and he knows what they want and thus only he would know what is marketing. Here basically the marketing team is just extra pair of hands to get the job done.

Similar to the above organisation a small sized limited company would see marketing as a sales support team and any work that any of the other teams don't want to do, fall under the ambit of marketing.

What we learn during our masters and what we actually see are 2 different things. For me what i gather from my experience and what i have learnt I just feel marketing means understanding the consumer, generating brilliant ideas to create innovative products to fulfill the consumer need, test the product and finally making impactful communication to maximise returns for the company.

The organisation that is the closest to what I think is marketing is definitely the global MNC but at the same time there are so many processes there which may curb your brilliant ideas, but then nothing in this world is perfect so how could an organisation be.......