Social media - a powerful banking platform

These days almost each and every company, whichever industry segment they might belong to, tries to leverage the power of social media. Australian banks are no exception. While researching on my present marketing group project, I found that the 'Big Four' Australian banks have set up Facebook and Twitter accounts and encourage customers to interact with them through these accounts. Not just that, some of the banks have dedicated employees handling these accounts.
But, there's one Indian bank which provides a clear-cut example of how social media can help salvage a company's reputation and bring it back from the brink of disaster. ICICI Bank, the largest private bank in India, was facing a serious turmoil during the global financial crisis two years back. There were serious rumours circulating in the air about the bank's exposure to US subprime mortgages and that the bank was close to going bust. Consumer forums on the web were rife with complaints about the bank's services, especially credit cards. Customers were panicking, closing down accounts and moving to other banks. The stock price crashed by 20%  in a single day. All seemed to be lost for ICICI.
Then the bank started a concerted effort to fix the problem with a major focus on social media. Twitter and Facebook accounts were set to address all possible complaints (the twitter account emphasized the fact that the 'bank cares'). The website of the company urged the customers to engage with the bank on social media and post their complaints, opinions and suggestions there. The company management recognized the power of the online platform and acted accordingly. And, slowly but steadily, the bank recovered.
On analyzing ICICI's social media strategy closely, it becomes clear that the bank realized that it can't afford to lose existing customers, especially the high-value ones. So, in a way this was a defensive marketing strategy, in the face of adversity, aimed at maintaining their existing customer base. Profit potential from typical upper middle class customers was high and the key was to address their issues to encourage high loyalty towards ICICI's products. In effect, the objective was to turn these customers into 'true friends' instead of 'butterflies' (high profit potential but low loyalty). The following are ways in which the bank managed to become 'true friends' with customers in the next couple of years:
 - Keep up communication links but don't overmarket - Social media marketing was a potent way to achieve this. The bank engaged with customers and addressed their problems without aggressively marketing it's products on social media.
 - Ensure that value is communicated both ways - Customers understood that the bank cares about them. Successful social media marketing helped the bank earn the trust of customers.
- Nurture and defend these - The relationship has been strengthened over the last two years with multiple Facebook and Twitter accounts for different bank services. Customers continue to engage with the bank through these accounts.
 - Focus on both attitudinal and behavioural loyalty  - That the social media campaign was able to promote loyalty (both attitudinal and behavioural) is evident from the bank's healthy revenue, profit and share price growth. Complaints remain but the bank focuses on an efficient grievance redressal mechanism, especially through the social media. 

This is just an evidence of the power and reach of social media. It's not just banks in India and Australia but businesses all over the world are realizing this. And, this makes the business of buying and selling so much more interesting.
  

How to market luxury to India's rich?

Famed American fashion designer Michael Kors is keen to invest in India. Mr. Kors, revered by the rich and famous for his classic women's sportwear, adorned by the likes of Michelle Obama and Cate Blanchett, is keen to tap the small but growing Indian luxury retail market. Cracking the Indian market can be a difficult proposition and I believe he'll needs some sound advice on how to devise a suitable branding strategy. So, here I am, at your service Mr. Kors.
The first step to successful marketing of the Kors brands in India would be to enter into a licensing agreement with a local company. Local regulations allow 51% majority ownership by foreigners of single brand retail ventures and Mr. Kors should take advantage of this. Entering into a license agreement with a well-known local company has a number of advantages.

- Economics - First of all, the economics of the licensing process is lucrative. The local partner would know the target segments and can market the brands accordingly through a variety of channels. Mr. Kors doesn't need to spend a fortune on setting up distribution channels.

- Control - Mr. Kors retains control over the licensing joint venture with the 51% holding.

- Coverage - Where should the stores be opened? Does a huge investment in standalone stores make sense at the initial stages of the business? I don't think so. Rather, Mr. Kors should test the market by opening a couple of stores in five-star hotels or malls in cities such as New Delhi and Mumbai. Contact between the brands and customers is an essential tool for successful marketing and branding and Mr. Kors should facilitate this. I'm pretty sure that the rich and famous in these two cities are already quite familiar with the content, i.e. they already recognize the Kors brands. But, even if they don't, the stores in places such as the Oberoi in New Delhi and Taj Mahal Hotel in Mumbai would bring them closer to the brands. In any case, these hotels witness a steady stream of rich local and foreign businessmen and travellers so I think Mr. Kors would already have a large potential clientele here. You can't really ask for a better testing ground for luxury brands. Following the steady build-up of brand loyalty, driven by the product quality, customer service as well as tv ads, social media marketing etc, Mr. Kors could open standalone stores in upmarket localities in the two cities.

Now, I have made the suggestions based on the successful experience of other luxury retailers in India over the last four years. For instance, Hermes opened their first store in New Delhi's Oberoi hotel in 2007. They had a 51:49 licensing JV with Khanna Specialty Retail, who handled marketing and distribution of products such as the Birkin and Kelly bags. And, Hermes opened their first standalone store in Mumbai earlier this year after sufficient market testing.
Since this a path well-travelled by other big players, Mr. Kors could also benefit by trying it out. As the saying goes, "Don't change unnecessarily what is already working."     

Marketing the DVR, British-style

Recently, I was watching an Indian advertisement on television after quite sometime. It was about the Indian telecommunications company, Bharti Airtel's digital video recording (DVR) service, launched early last year. The ad was well-made, featured two top Bollywood celebrities engaged in a conversation about the service and evidently the company had spent a hefty sum on making the ad. Then, it struck me.
The ad was actually closely modeled on the way British telecommunications giant BSkyB marketed its digital video recording service, Sky+ post its launch in 2001. Sky+ was marketed as an innovation that clearly differentiated itself through the technological platform and value-added services it offered. The emphasis was to let busy family members optimize their time and record live programs which could be watched later. Celebrity couples and opinion formers on radio were deployed to engage potential customers about the benefits of the product. This is exactly how Airtel was marketing their service as well, taking a leaf out of Sky+'s book to engage Indian customers. But, there were other aspects to Airtel's new service as well. Let's see how exactly Airtel was faring with the help of the five C's.
Company -  Airtel is the leading telecom company in India, widely regarded to have kickstarted the wireless revolution in India. In the DVR space, Airtel marketed the service as technologically advanced, supporting their Bollywood ad campaign with the MPEG 4 DVB S2 platform, a first in the industry. This was clearly communicated through the ad, which also talked about the 'record from mobile' feature of the DVR service.
Collaborator -  Airtel collaborated with companies such as Alcatel Lucent and Nokia Siemens for network upgradation and management of pan-India broadband and telecom services. This collaborative aspect was made clear through newspaper and magazine articles and ads and tv ads.
Customers - Indian customers are becoming fast-acquainted with new technological developments and look for products and services which match the high standards of developed world offerings. But, on the other hand, couples and families are increasingly pressured for time largely due to work commitments. Just like Sky+, the Airtel DVR sought to connect with the consumers by providing a compatible service and communicate its benefits in saving time and watching good programs later.
Competitors - India has witnessed a convergence in communication and entertainment spheres. The marketplace in India has, therefore, become crowded with each player vies assiduously for the consumers' attention. Airtel's marketing strategy sought to outdo its competitors through product differentiation and related advantages of compatibility and communicability. Airtel's ads focused on the simplicity of the service and compatibility with mobile phone technology.
Context - Social and technological trends indicate that Indian consumers are increasingly looking to save time and watch tv programs whenever it suits them. Compatibility with different mediums such as tv and mobile has also become important. Airtel's ads focused on these two aspects with Bollywood celebrities discussing how to use the DVR, how much time will be saved and where they can watch the programs later.
The jury is still out on the success of the DVR service but Airtel does want a large share of the pie, emulating what Sky+ achieved in England.
 

The Love Affair with McAloo

When Mcdonald's set up its first restaurant in India in 1996, it faced a difficult challenge. The market for fast food in India was expected to grow fast but traditional beef burgers would be complete non-starters in a largely vegetarian and cow-revering India. Adapting their offerings to suit local tastes and preferences was the key to success and the company needed to be imaginative. Thus came to life the ubiquitous and delicious McAloo Tikki burger. Or, the special Chatpata (spicy) McAloo Tikki.

The product is simple enough. The core product is a vegetable burger made of potato, a vegetable Indians love. What makes it special, though, are the spicy augmentations that an Indian customer expects at a reasonable price. For instance, the Chatpata McAloo Tikki comes with assorted traditional Indian spices, peas, vegetable-tomato mayonnaise and onions, another vegetable that is central to most Indian cuisines, at 20 rupees (around 45 US cents). But, these are really the minimal augmentations. The extra service or enhancement that exceeds the customers’ expectations is really the superior home delivery services in most cities where McDonald's operates. This is different from the conventional 'take-away' facilities which are popular in western countries, especially in the US; the home delivery services in India, in addition to the vegetarian offering, have been extremely successful in winning customers over.

Needless to say, sales of McAloo is booming; it's the largest selling product at most McDonald franchisees and accounts for a significant proportion of revenues. Advertisements exclusively focused on the McAloo Tikki have been targeted at families. The company, bolstered by its success, intends to forge ahead, into the smaller towns and cities. But, could they think of a potential product, one that would challenge the McAloo and set the bar higher? What about a McAloo Chicken Tikki burger? Well, I'm already lovin the very idea of it!