Friday, December 14, 2007

Where is Maharaja (Air India) going???

"Air India is delighted in being invited to join Star Alliance" said V.Thulsidas,CMD-Air India. But, the passengers are not that delighted Mr.Thulsi. The reasons are obviously the deviation from the basics of Customer service.

“Air India is delighted in being invited to join Star Alliance. This invitation comes in the wake of Air India’s merger with India’s leading domestic carrier Indian Airlines, thus making Air India the prime player in the Indian subcontinent. In addition, the recently announced fleet expansion of over 100 aircraft will help Air India serve the travelling public better in terms of global reach and services. In being selected as a future Star Alliance member, Air India will add value to passengers patronising member airlines of the alliance”, said Vasudevan Thulasidas, Chairman and Managing Director, Air India on 13th December 2007.

There has been a huge uproar by the passengers about the services of Air India in the last quarter such as technical snags, shortage of pilots, over bookings, rude behavior of Air India staff, frequent disruptions in the schedule, etc. And as the winter entered, the problems have become huge for all the airways. It isn't that the services of any airline except Air India have been delayed or disrupted. It is about caring the customers or informing the customers about the delays and the right timings.

Other Airlines take care of the passengers in case of any delay in the schedule or if the flight is rescheduled. They are informed in advance about any delays, disruptions and about the possible time of take off. In case of Air India, it is the other way round. The disruptions do happen but the information doesn't flow. When such things happen or when situations run out of hand the staff of other airlines atleast show their faces to the customers and are ready to give an explanation. But in Air India all of a sudden people at the Air India counters/Kiosks vanish. No Airline authority could be reached for exact answer. The basic principle says, "If something wrong happens on your side show your face to the customer and explain why it went wrong or atleast inform that it went wrong and you will deliver it within certain time." But this is missing. This has been the situation with Air India flights at New Delhi Airport, Mumbai Airport thrice in the last one month. Out of three times, twice it's with the International Flights.

Air India somedays back, has started off it's first Nonstop flight between Mumbai and Newyork which flew almost empty while the first Nonstop flight between the same route by Jet Airways was totally occupied. The reasons: high price compared to competitors as well as the image of the brands state owned Air India Vs private carrier Jet Airways. This forced them reduce the price of tickets but still the case is almost the same.

It has ordered for 68 aircraft in December 2005 and got the first one delivered in July 2007 and the whole fleet can be expected not before 2012. And now it goes for a STAR Alliance membership. This reminds me of a case study of the great Dakota Bank that we did in the last term for Consumer Behavior subject.

The Great Dakota bank has faced similar situation. It's customers had some problems with the services the bank provides with respect to the other banks. Hence the customers started moving towards other banks, and the growth in the number of new customers is stagnated. The Marketing head conducts a research(survey) and finds out what are the services that the people would like, which are the areas where the bank lacks, etc. But at the end, she goes out with offers of discount on minimum balance, other gifts, special offers, marketing campaign etc worth US $ 2 million for a period of 6 months. The number of new customers grow to a satisfactory level and at the end of 6 months the offers, discounts come to a close and the same old story continues from the 7th month.

What went wrong? They know where they need to improve, what do customers require and should be provided basically but still they went with other routes to attract customers. That made the numbers jump for 6 months and go down for the next months. And after that year they improved their services but didnot have the budget to go with the offers now and went into losses due to lack of customers.

The same thing applies for Air India too. It has problems on the ground. Before clearing the problems of customer service, fleet management, pilots it is going for attractive measures. This would indeed attract customers towards Air India flights but due to its ageing fleet, other problems the next thing that happens would be the same old story of sudden break downs, disruptions, and now the huge number of new customers would get the first impression of it's services.

and many more links... I hope the blog will be filled with links if i continue

"First impression is the best impression and the same impression can spoil the game." So, 60 year old Mr. Thulsidas....."Where are you taking Air India along with you?"

Thursday, November 01, 2007

RIN and Surf Excel

Much is discussed about the RIN and Surf Excel brand merger. Many of them have been seeing it only from the perspective of brand dilution??

First let's see what is the situation??

HLL has RIN bar, detergent and Surf Excel detergentBut P&G has extended the brand TIDE from detergent powder and launched TIDE bar which is expected to take away the sales of RIN.

At this point, HLL might have come up with a Surf Excel Bar........butthe problem is that they need to build a new brand in the category of product they are already into.....Will this help?? No is the answer. because, they have been already spending huge amounts over brands RIN and SurfExcel for Bar and Detergent powder respectively... and getting a new brand of soap would once again just cost them in huge amounts which would do nothing apart from competing with TIDE and would take away the share of RIN itself(remember it will also compete with RIN because they all are in the same price range...)

All this only leads to division of customers of RIN to be divided into 2 groups for RIN bar and SurfExcel Bar. So, huge costs to build a new brand to divide the customers into 2 groups which is useless for HLL. And if it doesn't come up with a SurfExcel Bar, the situation would be that TIDE with its present brand image will definitely take away a chunk of RIN customers....And one more cost that HLL would be incurring which P&G will not incur is the advertising and Branding costs.

HLL would have double the cost that P&G would incur as P&G will focus on building brand TIDE whereas HLL will be incurring costs to build brand RIN and brand SurfExcel.Hence, inorder to decrease the costs it is and would incur HLL has come out with the decision to change RIN to SurfExcel Bar..And now it is fine that HLL hasn't taken a bad step with respect to the strategywise..Now what we need to see is have they executed the decision well or has the execution gone wrong...

First looking at informing your customers about the change.. they have come out with a superb advertisement that has caught the attention big time...Second thing is they haven't changed the name directly by printing SurfExcel name on the Bar. If you have seen the new SurfExcel Bar(RIN Bar), there were names of RIN as well as SurfExcel side by side showing an arrow from RIN directed towards SurfExcel communicating to the customers once again that RIN bar will be SurfExcel BAR.

So, I hope the way HLL has executed the strategy perfectly seeing it from the side of brand as well as costs that they are incurring..But,one thing we need to see is how many days is HLL gonna use the same packaging for the bar. Beacuse, if it is gonna remove this sort of packaging very soon and replace it with only SurfExcel name, it would be problematic because the idea of name change getting into the mind of customers might not be that high..

Hence, it should continue the same packaging for more time so that the execution that was started perfectly would end in perfection...
Seeing all these can anyone think of any steps HUL might take in the near future..I can see one possibility from the side of HUL in this detergent market. might be that it would also remove the RIN Advanced Detergent powder since it has already moved out the RIN detergent bar...

Sunday, April 01, 2007

Will the poor performance of the Indian Cricket team affect the Sponsors brand image & their sales???

Everyone is aware of the poor performance by the Indian Cricket team in World Cup 2007. But have you ever thought of the impact that the brands or the sponsors would have because of this. In this article I will try to bring out some facts and analyze the impact and the future of sponsorships.

First talking of the Cricket World Cup, when it started first in England I don't think there are any sponsors for this and even this was the condition as far as I can remember till the 4th or 5th world cup where even the hoardings were not present. During this time the issue of security for players after the end of match came up and gave rise to the hoardings partially. And it appeared as a chance for companies to advertise and for the authorities to get some bucks to develop the grounds. If you remember some of the previous world cups you might have seen the logo or names of companies printed or painted on the ground. In the starting it was one name on the ground. Then it became one name on each side of the pitch. Then it became 2 on either sides of pitch. But if you observe the condition now it is 4 names surrounding the whole pitch. This shows the craze of sposoring cricket and how it is growing day by day. And you can even observe the hoardings which use to stay with the bounday line only now reached the seating floors of ground and still there are many brands ready to sponsor if there is any space left( if permitted they will paint the whole ground or surround the whole stadium with air baloons).

And In such a scenario, India being a land very crazy about cricket and so many sponsors for the team as well as event....India is out of the world cup in the league matches. If we see the brands that endorsed or sponsored, Pepsi takes the first place when it comes to relating players with brands that sponsored world cup matches or the team. And second position goes to Hero Honda & Hutch jointly where as all the other brands follow with Sunfeast also among the top row by the grace of sachin tendulkar.

Coming to the losses the brands might face, there are two types of losses. One is the direct loss and the other is loss due to negative impact.

Direct loss is something that comes because these brandshave invested a lot and now these millions of dollars of advertising would not have any impact on the brand. As per the industry experts, there would be a loss of US $300 millions of sponsorship money. And those who have bid for $50-60millions to ICC would be under great risk. This would be because some of the sponsors such as Hutch and Hero Honda have bid as global sponsors taking into account that India would reach the stars. But the gravity pulled them back before they left the earth's atmosphere.

Second is the loss due to negative impact. This is something which happens because of the negative impact on consumer's mind about the brand. Though this is a short-term and not a major problem, still the brands need to suffer a loss in the short term and this is as if sidhu says sometimes "Adding insult to the injury." This is the same adding up the sales loss to the advertising loss.

Now what do you expect the brands would do?? Will they invest for the coming ICC Champions trophy or the Afro-Asian trophy??? after falling into such a huge losses???

If you think they will not this is gonna be absolutely wrong. Cricket has its craze alaways in India and will have the same in future. If you can classify the audience for cricket into different sections, one would be those who will forget the indian team defeat the next day(but will have an impact on brands but not on cricket) and start watching it the next day. The other category is those who will not get interested into cricket unless until India shows them another stunning win or 400(team might be Bermuda also but that doesn't matter). So, this is something which the brands expect and though the same amount doesn't flow into sponsorships this time but a considerable amount would flow in again. There is also a proverb(I heard it in telugu only donno whether it is there in english also), that you need to earn back what ever you have lost in the place where you have lost only. The brands have lost in sponsoring cricket and it is the same point where they need to earn the amount they lost.

`Cricket is too big a game for Indians. The impact (of India`s exit) would be a huge loss, no doubt, but that will be short-term. The euphoria will be there even for the next time and the advertisers will again put in money,` says Prasoon Joshi, executive chairman, McCann-Erickson (India) Ltd.

But is this the end. There must be something in addition to this because if Indian team looses again in the coming trophies, it would be very tough for these brands to come up again in the future and I can bet you that they will not venture into sponsoring cricket unless until India wins 3 world cups in a row.

Then what should be done and what can be done.

`Cricket has always been accompanied by an opulence of optimism. I think sponsors must have a staggered penalty clause with the BCCI (Board of Control for Cricket in India). Why must sponsors be left to carry the can?` says Swapan Seth, CEO, Equus Red Cell, a Delhi-based advertising agency.

But is this possible, might be.... but not to a big extent because, this opulence of optimism is still alive in the rivals of brands that sponsored this time. Some of them are Coca-Cola, Bajaj, Brittannia......

Ohhh Brittannia...I just remember something which I was thinking to analyse from 3 months before the world cup started....but didn't do it till now. I hope everyone of you remember the Brittannia kao, World Cup jao campaign from Brittannia in 96,99,03 world cups. I wonder why didn't they come up with the same campaign again and those books which they gave for exchanging runs across counters. (I still remember the way I ate packets and packets of Little Hearts). Whay might have been the reason??? Did they realize the situation of Indian Cricket team before itself or what else... But this would be an interesting one to analyse why such a successful campaign for 3 world cups is stopped all of a sudden.

Continuing with our what must be there???/

It might be this way. The sponsors might fix an agreement with the channels broadcasting cricket about the advertisements that would be aired, and a flexible option of advertising only till the time India is in the competition. Like-Pepsi might pay for the whole series but It might air the ads of pepsi till India is in the competition and once India is out of the cup, if pepsi doesn't want the ads to be aired, the channel would return certain proportion but not the whole amount that would cost the remaining world cup media space.

This also has its pro's & Con's. As I said earlier about the rivals ready for sponsorship,.... if not this then what else could do???/ And what could be the reality????

That we need to wait for the time to come and let us see..............