Category Archives: Consumer Behavior

Marketing is telling believable stories

Some films succeed. Many others fail. Films are well-crafted stories. The films with stories which connect with a large number of people, succeed. The ones which tell a bad story or tell a story badly, fail.

Stories help us live a different life, even though temporarily. Seth Godin says marketing is creating and selling stories. Successful marketing means building successful stories.

Stories that connect with people.
Stories that let them live a different life, even though temporarily.
Stories that help people to lie to themselves.

In the absence of some other productive occupation, we love telling lies to ourselves. It is a distraction.  But a motivating one.

When a cream brand tells a girl that 4 out of 5 girls get softer skin after applying our cream, the girl dreams of being one of those 4. She goes and buys that cream.

Finally, after weeks of religious application of the cream with no significant improvements, the truth emerges and she lands among those 5th girls who did NOT get softer skin. This happens with 80% of the girls who buy that story of softer skin and get disappointed. By the time the futility of the promises and claims made by the company dawns upon a now-wiser girl, she gets hooked to another “New Improved” cream of yet another brand and buys another dream, believing and telling to herself the lie the brand’s advertisement said.

Thankfully for the older brand,  younger sister or cousin of this now-wiser girl grows up with dreams in her eyes and goes and buys that same cream with the dreams of softer skin.

This continues. Just like we sometimes watch the same movie or read the same book again and again even though we know everything about it, we keep buying the things we don’t need because of the lure of the story.

This is the success of marketing. Creating “New & Improved” stories and selling them.
Repeatedly.
Profitably.

Where has the money gone? Here it is…

India’s Gold reserves with RBI are approximately Rs.1.25 lakh crores.

But, India is spending almost double this amount every year, on mobile services and handsets. And that is about 2.06% of India’s GDP…

Telecom and Mobile handset industry is where the money from average consumer’s pocket is going. No wonder most of the markets are reeling under slowdown. India spends less on goods and a lot of time and money on talking…

Check some interesting numbers to get a better perspective :

India’s GDP in 2012-13 : Approx Rs 114 lakh crores (Reference :Wikipedia)

India’s Telecom Services sector revenues in 2012-13 : Approx : Rs. 2 lakh crores based on Q4-2012-13 report of TRAI (Reference : TRAI Report for Jan-March 2013 Quarter)

Mobile handset sale of last 2 years : (Reference : Economic Times article here.)

a) 2011-12 = Rs. 31,330 Crores

b) 2012-13 = Rs. 35,946 Crores

That means, EVERY YEAR, approx Rs. 2.35 lakh crores are being spent in India on Mobile services and handsets. That is approx 2.06% of India’s GDP. Considering approximately, 120 Cr population of the country, this works out to about Rs.2000 average PER HEAD PER YEAR….!!!

This means that out of about Rs.90,000 per capita GDP, EVERY Indian is spending average Rs.2000 per year on mobile phones…! Now that is a significant number…! A lot of Indian money is turning into hot air.  This has a very serious possible repercussions on the Indian economy.

1) Notwithstanding the immense communication advantage of mobile and Value Added Services and their contribution to the economy at large, the actual productive usage of these facilities is comparatively lower. Most of the mobiles are used for non-productive purposes (Chatting, Social Media, Group messaging,  Playing games,Listening to music, as a Camera etc.). Along with money, this is wasting a lot of productive time of the country’s populace. The general population, newly exposed to this technological solutions, is behaving like a small child who has suddenly entered a room full of toys. The instincts ‘to be there among the crowd’ is costing the economy a very huge amount of productivity. Unfortunately, this will be realized later than sooner.

2) A lot of this money is going out of the country, as most of the telecom hardware, mobile handsets and accessories are imported. This puts a lot of pressure on the Indian rupee.

3) With many of the family members now having their individual mobile phones, the monthly budget of the average household is very strangely skewed due to mobile hardware and services claiming a significant amount. A lot of essential goods and services are becoming predictably unaffordable due to this imbalance in the household income and expenses. This is one reason why all other markets are reeling under reduced demand.

4) The social impact of ‘the mobile revolution’ is generating a lot of lonely souls, destroying the fabric of relationships. This also gives rise to a lot of psychological disorders. Small children exposed to mobiles early on are reducing time on physical activities and spending a lot of time on mobiles, limiting their wholesome physical growth. All this finally impacts the general physical and mental health of the country and then to the economy.

It will be good if the child gets wiser after playing with the new-found toys for a while and getting back to its normal life.

Otherwise, these toys will prove to be very expensive for the economy in the end.

Why is it not difficult to understand customer expectations?

Because we all are customers. Most of the times. We regularly buy a lot of things that we need (and many things which we don’t need but we want..). And sometimes we get pissed off by that shopkeeper or that company. And we get delighted at some extra discount, service or some favor. And we become loyal to some brand or some store…. And we resent some other brand or some other store and tell others not to go there…

If we are in the business of some product, we may know that product, market and industry too well. But, we are not so familiar with all other products, markets or industries.

So, for all these products we are naive. And when we think of evaluating or buying these products, we behave in the same way as the customers for our products behave.

So, if we observe what we, as a customer, expect from a product, we can understand how our customer may expect from our products or from us. A lot can be learnt about our customers, only if we closely observe our own behavior.

And, just like as a customer we won’t like to be taken for a ride, our customers also don’t like if we treat them like a Bakra. So, please don’t look at a customer as a sacrificial goat that has come to fulfill your profitable dreams. Be aware that a customer is also a human being, just like us, and she also has her own aspirations and dreams, joys and emotions, frustrations and disappointments. Customer ko kabhi bakra nahi banane ka….Kyunki hum bhi kisike customer hain, na…?

Are we shattering our customers’ dreams?

A friend was thinking of buying a new car. One day, he and his son went to see the new cars available in the showrooms. They had shortlisted three brands and  visited the three car company dealer showrooms. At each, they understood about various models available within their budget and took a test drive.

When they visited the first showroom, they rejected that brand out of their consideration list of three brands, due to one small but unsavory incident. It went like this.

They had discussed the various models, variations, prices and even took a test drive. It took them one good hour. In the end, they wanted to see a brand new car of their desired model with a specific color. The salesman willingly showed them the new car kept for display. They were very happy with everything including the price, and almost started dreaming of owning the car. While they were leaving, the son remarked “The interior of this car is very good.” To which the salesman said, “Yes, they are tailor made.” Further inquiry revealed that the car shown on display was not the standard model with accessories listed in the brochure, but with a lot of customized add-on, which costs at least one lakh rupees, not anywhere mentioned in the brochure and also not informed by the salesman throughout this one-hour interaction with them. He disclosed it only when asked. The incremental cost was prohibitive for them and they had to leave leaving their dream behind.

At other two showrooms, they were shown new cars as they were described in the brochure. That made a lot of things easier to decide. They appreciated the business practices of these other two car dealers in contrast to the earlier one.

We all may have come across incidents where we had to pay some “hidden costs” which we were never aware of or were never told of. Such things happen when we are on tours and we are more vulnerable. At such times, we don’t have much choice than to pay up.  It creates very bitter word of mouth publicity and damages the brand reputation irreparably. But when the customer has yet to make a choice, such incidents result in direct loss of sales and our credibility.

Customers are delighted when they get more than they expected. And they get equally disappointed whey we shatter their dreams. Nobody likes people who show them the dreams and then increase the cost of realizing them. Dreams are too precious to be broken by bad marketing. Specially if they belong to our customers’ eyes.

When customer feels hurt the most?

When customers feel hurt the most is when they feel cheated by us while they are in a vulnerable condition, when they are helpless.

A person approaching a nursing home or a hospital for a surgery is one such vulnerable customer. A nursing home is a place where people arrive out of helplessness. Nobody likes to go there by choice, as it is hardly an enjoyable experience one may look forward to. Here if one is cheated or is taken for a ride, then it leaves a very bad taste with him who spreads the bad word outside, too. One such friend who had recently gone through one such unsavory experience narrated this with bitterness :

I had to admit my mother in emergency for a surgery at a private nursing home operated by a surgeon. When we checked in, we were given options of various rooms. When we asked for a separate, independent room, we were told that they have a Special Room with AC, attached wash-room and a bed for the patient’s companion. The room also has a refrigerator, we were told.

We checked in the Special Room. The room was average and disappointing, with the facilities mentioned were present only for the name sake.

a) The AC was there, but the switch was outside, under the control of the head nurse. She would switch on or off only during a specific time. Also, obviously there was no temperature control possible…!

b) The bed for companion was so small where nobody, except a child could sleep.

c) The funny thing was : the refrigerator was very much there, but it was locked…! When asked where was its key, we were told that it was being used for storing some medicines and the keys can’t be given. If we need cold water, they would provide from cooler outside, we were told, coldly.

d) Here comes the funnier part : The medicines belonged to the chemist shop downstairs. And, the chemist shop belonged to the nephew of the surgeon…! He would come occasionally, whenever he needed to take out some medicines… The most strategic arrangement was, the doctor prescribed medicines which were available only at the nephew’s shop. You won’t find them from any other shop nearby. How convenient?”

The friend was angry and hurt for being shortchanged, because in the name of Special Room, what was given was a set of hollow promises. And the compulsion for buying the medicines from a specific shop was also an irritant. The doctor also charged many things exorbitantly, much beyond the estimate given earlier.”

My friend had no choice but to comply, even though reluctantly. But, he vowed not to recommend this doctor or the nursing home to anybody else. In fact, he alarmed all those who listened to him about the unfair practices going on there.

If we treat our customers badly, particularly when they cannot take any objection, or if we take advantage of their helplessness, they may tolerate it then out of no choice, but they may feel terribly hurt and disappointed. And when their bitter experience is spread to others, it spoils our reputation badly. Our business suffers irreparably due to the poor mouth publicity.

We must not take advantage of the customers when it hurts them the most. The bitter experience they will neither forget nor forgive. Instead, at that time if we genuinely help them, that too, they will never forget and thank us a million times. Such grateful customers will remain with us forever.

Customer ko unnis-bees ka fark bhi padta hai…!!!

I came across a recent and real example of how a new business loses its credibility in important customer’s mind and how customers feel taken for granted. We all can learn from it.

Pradeep runs a very reputed coaching class in Mumbai. It has more than 5,000 students on its roll. To all these students, they give some stationery like bags, note books, file folders, pens etc. with the coaching class branding. Pradeep ensured that this stationery was always of the best quality. He never compromised on the quality of things on which his brand’s name was printed.

Shrikant, a cousin of Pradeep, started a new wholesale business of PVC file folders. They supplied to bulk users and coaching classes were one of the target customer segments. He approached Pradeep and requested for an order of file folders. Pradeep showed him his regular folders, which were sourced from the best manufacturer with the best brand and quality reputation in the corporate market. Pradeep required 20,000 folders every year. He told Shrikant to provide him the same quality at better rates. Shrikant readily agreed and promised that he will certainly match the quality and will give better price. He took a specimen sample from Pradeep and went to work. Shrikant was very happy that he got a big order right in the beginning of his venture. That was a very good start to build upon, he thought.

The folders were delivered in due course. To Pradeep’s surprise, the quality of folders was not as per the specimen given to Shrikant. It was distinctly inferior. He called up Shrikant and asked for the reason for the difference in quality. He made it clear to Shrikant that he was not happy as the quality obviously did not match that of his earlier supplier. To that Shrikant replied, “I agree the quality is not same. That company gets its material from foreign markets on exclusive basis. It is not available in India to anybody else. What I have given you is the next best to it. And the rate is also 15% less. Sirf  unnis bees ka fark hai. Nobody notices in so much detail. Tere students ko kya fark padta hai….?

But it made a difference to Pradeep, to whom quality was of supreme importance. He realized that he had made a mistake of experimenting with Shrikant without checking his credibility. He felt that Shrikant should have communicated to him when he found out that the same quality was not possible. Pradeep felt being taken for granted and he disliked it.

He never repeated the order to Shrikant. Shrikant’s inability to understand that customers may forget the price, but they always remember the quality of products cost him a very big customer in the early stage of his business.

Really, customers never forget the bad quality or bad service. And they do not forgive being taken for granted. In the matter of quality, unnis-bees ka fark is a big difference. It can kill the credibility of a business. Forever.

BIG reasons of Big Bazaar’s success

Sometimes accused of being a Wal-Mart wannabe, Big Bazaar is surely not a Desi copying an Angrez for sure. It has received great success on its own steam and can be called our own home grown “India’s Wal-mart”, even though the comparison is out-of-place and unnecessary. 

How could Future Group’s Big Bazaar achieve what many Angrez companies still dream to do…? There are some very good reasons and learning lessons for all those who aspire to earn from the buying potential of swelling middle class of India.

1) Big Bazaar has given freedom of choice to those who did not have it in their life
Big Bazaar’s founder Kishore Biyani has popularized the very logical categorization of India in 3 divisions. India-1 is the Upper middle class, about 14% of the population that is the actual consuming class. Serving to this India-1 is India-2, forming about 55% of the country’s population. These are drivers, peons, cleaners, maid servants etc. etc. who have very meager salaries and live a hand-to-mouth existance. The third part is the balance 31% of India-3, which is struggling for the existence.

The Kirana shops which sell goods, do not offer the choice, ambience, service and of course the discounts Big Bazaar offers to customers. You imagine going to your nearby friendly grocer to buy a toilet soap. He will ask you “Which one do you want?”. If you know, you get what you what. But, if you want to know how many new brands, types, sizes are there to choose from, grocer will not be very happy to tell you or show you all this. Such situation is even worse for those from India-2. They are not treated very well if asked such questions or trying to get more information, trying to get a ‘choice’.

Big Bazaar gave them choice. A freedom to choose. It offers a very wide range of goods required for daily needs. You can have a look, touch and feel them, compare and then decide to buy. With the plethora of FMCG items occupying the shelves of stores, such choice is really convenient and facilitating the buyers. This choice, I think, is one very important reason for Big Bazaar’s success.

2) Big Bazaar connects with the masses effectively
The communication of brand Big Bazaar is sharply focused and to-the-point. Big Bazaar talks in local language. Observe Big Bazaar’s communication.

  • “Isse Sasta Aur Accha Kahin Nahin”
  • “Saal Ka Sabse Sasta Din”
  • “Hafte ka Sabse Sasta Din”
  • Sell your Bhangar at great rates”
  • “Purana Do Naya Lo… Badal Dalo”
  • Stall ke Bhaav Balcony
  • Chane ke Bhaav Kaju
  • Paise Jodo Kaam Aayenge

All this smart communication has worked wonders. Today also, you observe any of the advertisements of Big Bazaar competitors. Their tag lines are still in English. This Angrez attitude does not connect with Indians. Big Bazaar has understood it clearly and others have not yet woken upto this simple fact, giving Big Bazaar a clear, distinctive position in customer’s mind. Big Bazaar is perceived as a store which knows India and Indians well. Its communication has been successful in achieving this objective.

3) Big Bazaar has understood its target customer very well
If you go to a super store in any mall, we may find some very smart boys and girls greeting us. This may be good for some, but people like me sometimes get frightened by these fine and smart people, because they are so much better looking than me. They speak so much better than me. They are dressed much better than me. I get put off by all this and hence avoiding such stores who have very smart people greeting me. At Big Bazaar, the staff is helpful, but not overtly smart. You don’t get frightened by their style. This is very practical. The customer coming to Big Bazaar is of the middle class If they are greeted by people smarter than them, they feel uncomfortable. So, Big Bazaar has ensured that customers are not made to feel small by overbearing staff members. This is one very smart strategy of Big Bazaar and it reflects its deep understanding of the customer psyche.

4) Big Bazaar has understood changes reshaping India very well
With increasing urbanization, more and more people are migrating to cities from villages. In villages, there are no big stores, but in nearby towns there are weekly ‘mandi’ e.g. Somwaari Bazaar, Budhwaaar Bazaar, Ravivaar Bazaar etc. In such mandi set up, one gets to look, see, touch  and feel all the ware that is for sale. This is what the village customers are habituated to do. When they come to cities, they had to buy from small kirana shops, where the goods were not displayed freely. They had to ask for what they want and get away from there. Big Bazaar recreates that mandi environment for them. It gives them the same open display of all that is available, and that too, in elegant, clean, air conditioned ambiance with helpful staff to support the customer.. And I think, this is profoundly important from a customer’s point of view. The current demographic shifts happening in India are understood very well by Big Bazaar and are implemented profitably.

The mythical 50 Crore Indian middle class is a part of many smart projections of world leader retail giants willing to enter India. But, Kishore Biyani and Big Bazaar have succeeded in getting to the true understanding of Indian middle class. This a very important learning lesson for all those who wish to succeed in retail in India.