Rocket Singh - Marketing Man of the Year !!

Pradeep Saxena, Sr Vice President, TNS Automotive

"Half the money I spend on advertising is wasted; the trouble is I don't know which half," said John Wanamaker, and he must have known, since he was a visionary businessman of America who gave his employees free medical care, education, recreational facilities, pensions and profit-sharing plans in the second decade of 20th century, much before such benefits became standard.

Today, almost a hundred years later his statement still sounds refreshingly true and is sworn to by any marketer worth his product leaflet. It is so popular that often it is attributed to some of the better known giants of modern day management and advertising such as Peter Druckerand David Ogilvy.

But why are we discussing all this in an auto magazine? The reason is quite obvious. Automotive industry is one of the highest spenders on advertising in India. The total ad spend in India was estimated at close to Rs 21,000 crore for 2008. Spend on Print accounted for 47% followed by TV at 41 %. In the past ten years, number of TV ads has grown by more than 12 times. Today automotive sector ranks 7th among all sectors advertised on TV. This reflects an upward movement of two ranks in past ten years.

In the first seven months of 2009, TV advertising by automotive sector grew by 51% over the same period last year. Motorcycle brands contributed 45% whereas passenger vehicle brands contributed 42% of all TV ads during this period. Maruti, Mahindra & Mahindra, Tata Motors, Fiat and Hyundai were the largest automotive advertisers on TV in that order.

Even John Wanamaker would have found it difficult to understand why the Indian car makers spent so much money on TV in a year hit by global financial crisis. And TV is just one of the media used by the industry. Another big favourite is newspapers. But what is the accountability of such a huge spend. Rocket Singh who has now become the brand manager of a newly launched car was asked the same question by the Director - Marketing. He further wanted to know which of the two has a higher influence on a prospective car buyer. Rocket Singh was completely foxed balancing the expense on TV and newspapers because he can't figure out whether the same amount of spend will get him better results on TV or in Press? And on top of that his boss also wanted to know the effectiveness of the emerging digital media and his recommendations for the same.

Can we help Rocket Singh? His problem is that there is no common currency, which can be used across media to measure the effect of the spend. Traditionally, TV spend's effect has been measured in terms of viewership ie TRPs, whereas the effect of press spend is measured in terms of readership. Obviously it is not possible to substitute TRPs with Readership and vice versa. The issue compounds when we need to consider multiple media including Digital, Outdoor, Radio, Internet, Press and TV reviews etc. And the list doesn't end with just the paid form of media, there is an unpaid form as well such as the 'word of mouth'

 

How do brands build success? How does one define the success of a brand? When enough people desire it or when enough people buy it? The debate is probably as old as the origin of brands. Brand champions believe that as long as the consumers continue to desire the brand, it is successful whereas business heads and sales people count the success in terms of the revenue it generates. In fact, to be termed successful a brand needs both - the consumer's heart as well as his wallet. There is really no point in having one without the other. Therefore, two essential components for the success of a brand are its: a)  Power in the mind, and   b)  Power in the market.   Power in the mind refers to the quantum of positive disposition towards the brand, which brings it into active consideration at the time of purchase. It is a reflection of the commitment, loyalty or love for the brand. Power in the market, refers to those elements of marketing mix, which are responsible for converting the disposition into transaction. These refer to availability of the desired product configuration, at an acceptable price, at a convenient location and such other factors. To be successful, a brand needs to have both - the power in the mind and the power in the market. In a way they are multiplicative. If one is zero, the overall sales of the brand is zero. Till a few years ago, BMW existed in the minds of luxury car buyers in India and had sufficient Mind Power, but there was no Market Power in terms of distribution hence the result was zero sale. Conversely, there are car brands, which have great market power in terms of distribution, a distinct product advantage such as a Diesel Engine, competitive pricing and still sell low volumes because they have very little Mind Power. To build Mind Power, brands need to build relationships with existing and the potential consumers. Relationships are built thru Brand Encounters that people have with brands. In a competitive world, all brands are trying to build relationships with all consumers by creating encounters. To be successful in this endeavour, the Brand Encounters need to be: ▪  Relevant   ▪  Differentiating and   ▪  Impactful.   Such brand encounters need to be repeated again and again to build the relationship. Brand Encounters are nothing but messages (content) transmitted by brands to their target consumers through various touch points / media. For simplicity, these touch points are referred to as Contacts. Therefore, there are two parts to building the Brand Relationship. These are: ▪  Content which is relevant, differentiating and impactful i.e. 'Quality of message'   ▪  Frequency with which it is delivered i.e. 'Quantity of message'.   The key to brand success is connecting with the consumer using the above two elements.

 
Moreover in the case of TV, TRPs are a measure of the viewership of TV program and not that of the advertisements. Therefore, the effect of TV spends is measured in terms of GRPs. In reality GRPs are not the effect of TV advertising, they are a measure of the quantity of TV advertising purchased by the advertiser and therefore just an input to the consumer. Hence, these can't be treated as a measure of the consumer's 'take home' from the spend done by the marketer.

If this is the situation with just one medium TV, how about all other media used by the marketers. These days marketers use a huge number of media options to reach the buyers. Some examples in case of cars are:

▪	TV Advertisements
▪	Newspaper advertisements
▪	Dealer promotion ads in newspapers
▪	Ads in magazines
▪	Manufacturer's website
▪	Internet ads.

 
In addition, there are other forms of media (we will call these contact points or 'contacts') intrinsic to the buying process. These are:

▪	Dealer Sales Person
▪	Dealer Showroom, etc.

 
Then there are those contacts, which are very important but are available without any direct cost, such as

▪	Opinion of relatives and friends
▪	Cars on the road

 
and soon...

So how does one compare the effect of one media with the other. After all that is the key to rationalizing the media spend. For example, if Rocket Singh spends Rs. 100 on TV advertising and another Rs. 100 on newspaper advertising and if we are able to tell him the effect of both on the target group in a common unit, we will know which spend has been more effective.

What should that unit be? It is a question that has foxed marketers and media professionals alike for a long time. Integration, a company owned by ex-media and advertising professionals has developed just such a unit. It is a measure called 'Brand Experience Point' or BEP. It measures the quantity of Brand Experience created by a brand through individual contacts (media) used by it. This is a common unit, which can be used across all contacts and is amenable to all arithmetic operations. For example, BEPs generated by Rs. 100 spent on TV and Press each can be compared to assess the effect of either medium. They can even be added to calculate the Brand Experience generated by the two media in total.

TNS Automotive conducted a syndicated study in the Indian car market during Jul - Sep 2009 using the same concept. They supported it with two of their proprietary tools namely Conversion Model and Futureview. The study is called 'Contact Performance Optimization (CPO)'. TNS has conducted similar studies in 2008 and 2007 as well.

 
The study was conducted among intending buyers and current users of cars across ten media markets. Since study covers all forms of media through which a brand comes in contact with the consumer, the term 'contact' has been used in place of 'medium'.

Going through the study, Rocket Singh can see that 'Word of Mouth', Test drive' and 'Cars on the road' are among the five most influential contacts apart from TV and Newspaper ads. The influence of the word of mouth has grown over last three years and that of newspaper ads has actually come down. Still, the car marketers spend a huge amount of money on full page ads in newspapers and very little is spent on buzz marketing. Predictably, the influence of manufacturer websites has grown over the years. The younger age group notices the websites more than the older age group. The influence of Test Drives has also shown a consistent rise. Once again the younger people seem to experience the test drives more than the older buyers. Majority of car companies use celebrities in their advertisements. Overall influence of celebrities is low in the category but has been increasing. The older age groups notice celebrities less than the younger age groups. The influence of car test reviews on TV has been going up and they are viewed more by the younger buyers. It is understandable because a moving car shown on TV with accompanying expert comments is more interesting and informative than a press article. However, the advantage of a press article is its easy retrievability when required. But the younger generation constantly up on the learning curve can probably do the same on the Youtube and such other internet portals.

Rocket Singh can also observe that the influence of newspaper ads and car test reviews in newspapers and magazines has been steadily falling. However, newspaper ads still remain the fourth most influencing contact. The influence of Direct Sales Agents and road shows is also on the decline.

Upper Premium Compact segment has witnessed a lot of activity in the recent past with the launch of cars such as Maruti Ritz, Hyundai 120 etc. Buyers of this segment notice the websites more than the others. The buyers of expensive cars also pay more attention to the internet forums and blogs. Test drives are experienced more by the buyers of midsize cars.

The cars on the road generate the maximum brand experience in the category. It is almost intuitive because automotive category is probably the only product category where a potential buyer is constantly exposed to all brands without having to make any real effort. He can actually touch and feel the product almost at will in his own time and without incurring any cost or obligation. It is also quite easy for him to identify the users of various brands and therefore, he can easily solicit their advice.

Almost one third (31%) of the total Brand Experience generated by the category is done by just three contacts viz 'cars seen on the road', TV advertisements and 'manufacturers' advertisements in newspapers. This is an upward movement of 8% from last year's 23%. Next four contacts generate 18% of the total Brand Experience. Thus, almost half of the total brand experience in the category is generated by just seven contacts and it takes 28 contacts to create the balance half.

If Rocket Singh cares to club various contacts into groups he will realize that the maximum Brand Experience is generated by mass media contacts followed by indirect contacts. This is simply because the Indian car industry uses at least 11 mass media contacts whereas there are only seven indirect contacts such as cars on the road, opinion of friends and car displayed in public places. Among the top 10 contacts, in terms of Brand Experience, four are mass media, three are indirect and two are Point of Sale and one is 'one on one'. The key learning is that even when industry's thrust is on mass media, in reality, the ranking of five out of the eleven contacts in terms of influence is rather low. This essentially means that the spend on these contacts is likely to give low returns.

Another learning for Rocket Singh is that not all brands use all contacts in the category. Some contacts are used by all brands and are therefore highly cluttered. Example is mass media contacts, such as, TV and newspaper ads. At the same time, there are contacts which are seen to be used by relatively few brands. For example, whereas all brands use websites, only a few are able to do this in a distinct manner. Accordingly, this contact doesn't get associated with all brands and therefore presents opportunities to the brands which use it well. For others, it is just a waste of money.

All brands treat 'Market' Share as a measure of success in the market. It is also possible to calculate the 'Brand Experience' Share (BES) in the market. It has been observed across markets and product categories that the Brand Experience Share and Market Share move in the same direction 80% of the time. In simple terms, a high Brand Experience Share almost guarantees a high market share.

In 2009, Maruti WagonR has been able to create the highest Brand Experience Share followed by Maruti Alto. At the same time, Tata Nano's brand experience share is the lowest among the 18 brands. The success of WagonR is evident from the fact that it has been able to displace Hyundai Santro from the top position and is able to garner a higher BES than the larger selling Maruti Alto.

 
We don't know what is the status of Rocket Singh's brand in terms of Market Share and Brand Experience Share, but we are sure that now he can easily explain to the Director, Marketing:

a)	TV ads work better than newspaper ads in the car category.
b)	Apart from these two, which other Contact Points are highly influential for the car category.
c)	Which contacts are working optimally or sub-optimally for his brand.
d)	In case of sub-optimal contacts, how much investment is required to bring them to an optimal level.
e)	Is his brand leveraging the Brand Experience Share to achieve Market Share.

 
With that we are sure, Rocket Singh is not far from becoming the Marketing Man of the year.