by Anand Halve

Americans are delightfully simple. For instance, if they are convinced about a concept or a line of thinking, they’ll say, “I’ll buy that!”
The language of commerce - a willingness to pay - being the definitive proof of acceptance!
However, for some time now, marketers have been in denial about this fundamental axiom.
“Give it away free” has been a popular business model backed VC, PE and other acronymous sources, staring at teenaged geeks bursting with pimples and ideas.
The notion being that someone else (read advertisers) would pay for a product being consumed by others.

The media (print, TV, social, antisocial, whatever), succeeded for several decades. But in the process, they have created a monster.
A consumer who – like a farmer buying fertilizer – now expects purchases to be subsidized. This ‘freeloading’ attitude is why people get their knickers in a knot when asked to pay more, whether it is to watch the antics of pre-pubescent brides or post-pubescent cricketers.
The expectation from subsidies however, grows rapidly. Once fertilizer is subsidized, one expects the seeds to be subsidized. And power charges… and diesel… you get it.
“The price I pay is my acknowledgement of value”
‘Price’ should be the agreement on value between buyer and seller, but consumers now expect some ‘invisible benefactor’ to pick up some or all of the tab.
Consider email. What’s the worth of the email or chat service you say you love?
Rs. 15 / day? (one bottle of drinking water?)
Rs. 20 / week? (one McDonald’s Happy Menu meal?)
Rs. 300 /month? (one home delivered pizza?)
I’ve asked dozens of people and almost no one is ready to pay anything at all for web-based services. They’d rather switch to another free service.

How many unpaid Limewire downloads do you have on your computer?
Do we ever wonder who pays when we take off into the skype, so to say?
Would you limit the number of results delivered if you were charged ‘per result’ for search?

Undifferentiation via borrowed glory
However, the potentially fatal threat to branding is the number of marketers who seem to accept that ‘price’ itself is a gaseous notion, uncoupled from perceptions of value delivered.
Because it’s not just consumers who are freeloaders. So too are marketers.
PC manufacturers allowed themselves to become undifferentiated when they cheerfully backed Windows and gleefully embraced ‘Intel Inside’, as Intel picked up part of the advertising tab.
Result? Most PCs became little more than boxes with ‘Wintel’ inside.
Non-stick cookware brands buried their differences under ‘Teflon’, when most brands started making Teflon (a Du Pont property) their main claim to fame.

Commodities pretending to be brands?
Supposedly, one of the key metrics of brand equity is, “the premium a brand commands”
So how come Coca Cola, long revered by Interbrand, if not Indian consumers, can’t command any price premium over its competitors?
Conversely, one of the most critical pieces of evidence that Harley-Davidson is a great brand, is the fact that people are willing to pay a lot more for it than for a ‘commonplace motorcycle’.
Likewise, your conviction that the Gucci name has great cachet shows when you pay hundreds of times more for it than for a handbag on Linking Road.

A product that only sells at a price identical to that of its substitute products used to be called a ‘commodity’.
But maybe I’m just old fashioned.
“Me-too… but I have a bigger advertising budget”
It gets worse.
Does the world really need dozens ‘ayurvedic shampoos’? Or readymade shirts? Or whatever.
But marketers of even completely me-too products seem to feel that with a celebrity any brand can differentiated. So every Sunny Deol flexing his equipment in a Lux Cozi banian, competes with a Sunjay Dutt parading his pectorals in a Rupa banian!

Similarly, while the already-almost-forgotten Olympic boxer puts on his gloves for one insurance company, Tendulkar bats another.
Do people really follow sport stars into a bank? Do you?
And how many of us rushed out to get a BSNL connection after watching Deepika Padukone’s bizarre imitation of a classical dancer on a Kerala house-boat?

Aah, but marketers seem to buy the story.

by Anand Halve

Advertising is often out of touch with reality.
Of course this is partially intrinsic to the profession. After all, it is the job of the ‘Dream merchants’ to suggest to prospects that Brand X tablets will give them Bipasha Basu’s figure or that a pair of shoes is the road to success.
Indeed, the prospect shares this suspension of disbelief, as he imagines how a particular deo-spray or shirts from a certain store will turn women into helpless victims of passion who will hurl themselves at him.
In normal times one takes these exaggerations as acceptable, but recent events in the financial arena – when words like ‘tsunami’ and ‘meltdown’ have become commonplace - compel us to take another look at this phenomenon of exaggeration. And see that financial services make advertising professionals look like amateurs in the game of ‘hyper-reality’!

Caveat emptor v/s relentless urging
It is a cliché that customers must be watchful and take well-considered, rational decisions. But we know that humans are not rational in the face of the relentless combined actions of marketers and media. What else can explain how anorexic, emaciated women with dissipated expressions are considered the definition of ‘beauty’!
Similarly, is rationality at work when people acquire dozens of credit cards or go to foolhardy lengths including taking loans, to play the stock market game?
But then people are being urged not to be reasonable.
This doesn’t cause too much harm, if it’s only a DTH service saying “thoda aur wish karo”, but it takes on a different dimension when a financial service urges you to continually seek more and indeed that it is not a worthwhile life if one doesn’t follow the principle of “karo zyaada ka iraada”.

The fine print
Mutual Funds (MF) and IPOs not only fan the flame of greed, they turn disclosure into a farce. The unreadable manner in which caveats at the end of MF or IPO ads are presented show clearly there is no intention of following the spirit of the law.
And of course there’s the escape clause in the fine print at the bottom of ads saying: ‘Past performance is no assurance of future performance’ (never mind that the bold headline proclaims the advertiser’s track record!)
The reality shows up when you discover that a brand that promised you “Kal par control”, had no control over its own NAV tanking.

Unfortunate timing
For some brands though, it’s just unfortunate timing.
For instance, it’s strange to see TV commercials and print ads from a new player in the financial services area, saying “Make it happen”, when there are enough news items in national and international media informing you that what this company has been forced to ‘make happen’ is a massive bailout, and the part-sale of ownership to the Government.
Meanwhile, intense newscasters gaze out penetratingly from TV screens, discussing financial markets in incomprehensible terms, making it necessary to help the layman understand the meaning of the verbal confetti being tossed around.

So here are some frequently used terms and what they really mean.

Going forward: A meaningless term, used to suggest that they also considered the options of going sideways, backwards or off at a tangent but chose, after deep thought, to ‘go forward’.

Market sentiment: The actual reason why share prices move. To be used only when the prices drop. The term to use when the prices are going up is “strong fundamentals”.

Highly leveraged: Fancy term for “took on commitments way beyond what we had any hope of fulfilling, but we thought there were even more greedy people around, which would allow us to get away with it”

Profits under pressure: We are getting whipped, and we will not make the obscene profits we (and breathless reporters) thought we’d continue to make forever.

Consumer confidence is low: People don’t seem to be spending like drunken sailors.

Integration /Uncoupled from the world economy: To be used on the day the Indian share prices DO or do NOT mirror the fall in international stockmarkets respectively.

Risk management: An oxymoron

And now, may I request you to observe two minutes of silence for all the stock options that have died in the not so recent past?

Thank you