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

The skeletons tumbling out of the Satyam cupboard attracted a flock of self-righteous vultures, if one may mix metaphors.
However, this context raised questions about other acts of willful default including by those in the marketing and communication business.

Turning a blind eye
That the senior managers, PwC, bankers etc. were ‘asleep at the wheel’ at Satyam has now been repeated ad nauseum.
Sucheta Dalal (MoneyLIFE Issue of 15/01/09), points out facts that have not been as widely noted:

“Its (Satyam’s) FY2001 results were flashed on two websites 15 minutes before the board meeting was scheduled to start.

In August 2002, the Department of Company Affairs questioned its accounting methods, but that investigation was buried.

Analysts, who tracked Satyam in the mid-1990s… say that a private company of the Raju family had built all its software campuses. Although no wrongdoing was alleged, there was suspicion that Satyam’s construction cost was somehow higher than those of Infosys or Wipro.”

About the Satyam-Maytas palindromic imbroglio, she writes:
“Strangely, the aspect of money being transferred to the family does not seem to have come up at all. Were the directors, earning fat sitting fees, too polite to ask? … After all, Dr Palepu earned Rs.92 lakh from Satyam and other directors earned as much as Rs.13 lakh, plus perks.”
In 2005-06, Business Today and AT Kearney ranked Satyam in the Top 13 Best-Managed Companies in India. In 2007, E&Y gave Ramalinga Raju its Entrepreneur of The Year award.
Did the truth escape the attention of all these worthy organizations, and that of the TV cowboys, who lean forward with such intensity that one fears for the cartilage of their elbows?

The emperor’s new clothes
But there are other acts of willful default too. Among them is not pointing out that the Emperor may be “reveling in nudity. “I have known people who said that ideas which many people considered crazy were nonetheless executed, because ‘nobody wanted to ruffle any feathers’.
Consider a consumer durables maker who introduced a “Talking washing machine.” Did anyone involved believe the Indian housewife was so lonely she wanted to converse with a tumble-dry mechanism? What next… a microwave with which she can have a meaningful relationship?
A couple of years ago, everything you looked at was infected or injected with aloe vera. Now, it’s the strawberry season. Wherever one turns, there are nubile actresses slathering their body and pre-pubescent kids lathering their hair with strawberries. “What next?” wonders the terrified consumer.

Guilt by concealment
Marketing Research reports are sugar-coated at the behest of a Marketing Manager – or often, even without any such push – and make statements such as, “There seems to be some resistance to this new product concept among consumers”. In honest-speak that would read, “Everyone is convinced this idea stinks”.
Similarly, marketers happily introducing products with “claim level” statements such as, ‘contains the goodness of XYZ’, while hiding the fact this goodness comes from non-XYZ sources.

Gulliblity @ the speed of light
Sometimes, the situation involves naivete of unbelievable proportions.
But it is said that for every credibility gap, there is a gullibility fill.
Many of you have received absurd email forwards. One said that the chap who created Orkut platform received money every time someone signed up, or posted a scrap on it, etc. It would have taken only a couple of minutes to figure out that if that were true, the guy would have become the world’s richest man in less than two weeks. You may say that’s only an email, but knowledgeable-sounding ‘experts’ talk equally wildly of ‘monetising eyeballs’ (and possibly other body parts) and nobody says, “Hello, but in this business idea will anyone ever actually pay for anything …or is FREE the business model?”

James Grant said after the Enron episode: “People are not intrinsically greedy. They are only cyclically greedy.” Perhaps they are also “only periodically guilty”. But it is for each one of us to decide if default is a fault.

by Anand Halve

After the poor voter turnout in Mumbai, Rahul Bose was “stunned by the low voter turnout percentage…given the attention by media and NGOs”

 Did he really believe 5.3 celebs and 2.7 ad campaigns were going to revolutionise the electorate?

 It’s a classic case of getting carried away by one’s own – or others’ oratory. The PR industry’s mantra for everything is “we’ll create hype around the product / event / whatever”. But hype doesn’t mean anything actually happens.

 After November 26 there was enough righteous baying (and braying) for blood over security lapses. But people continue to use their mobile phones on aircraft in violation of security rules. Ditto with carrying more than one piece of hand luggage.

 People switch off their lights for one hour, then restart their ACs, virtuous in the belief that they’ve done their bit to solve the world’s energy crisis.

 But it is not only well-meaning NGOs and do-gooders who fall into this trap of taking ‘communication decibels’ as a measure of ‘effect’.

 Corporations are just as mistaken.

 Companies unveil a new logo with much fanfare, promising “change”. How many genuinely new initiatives does one see from these companies thereafter?

 Media channels launch fierce initiatives (with logos, visual montages and signature music) to solve murders, ensure justice, eliminate farmer suicides and other social ills, until the next Breaking News takes them to a hospital where an overgrown adolescent film actor is suffering an ingrown toenail!

 The truth that’s forgotten in all the hoopla, is that lasting value is built brick-by-brick. Over time. Not created instantly with smoke and mirrors.

 A possibly apocryphal story may illustrate what I mean.

 Many years ago, Charles Saatchi was on TV after Margaret Thatcher won the UK elections. Commenting on Saatchi’s ‘Labour isn’t working’ campaign for Mrs Thatcher, the interviewer gushed, “you toppled a Government, you created history, you have forever changed politics…”

 Saatchi stopped the spout with, “Don’t be silly, it was just a bunch of ads!” and pointed out that there was much more to it.

 Exactly.