An improving economy and the rapid opening up of the Indian market has given rise to a group of affluent consumers who are more than eager to adopt the latest fashion trends. According to the latest Nielsen Global Luxury Brands Study, 35% Indians who participated in the survey agreed to buying designer brands. This is the third highest percentage globally with Greece leading the countries with 46%, followed by Hong Kong with 38%. Despite the prevalence of imitation designer-branded goods in some markets, surprisingly more than three-fourth of Indians surveyed do not think that imitation products match up to the real deal.
The top brands that Indian consumers spend on are Calvin Klein (34%), Gucci (25%), Diesel (24%), Christian Dior (16%), and DKNY (10%). India has also made it to the top ten markets globally for some of the brands. India ranks third highest globally for people who buy Gucci products. It ranks sixth for Calvin Klein, ninth for Diesel, and tenth for Fendi for buying these brands globally.
“People are travelling overseas more frequently now and quite likely their interactions with foreign brands have increased considerably. Moreover, foreign brands are synonymous to status and our survey finds that 57% of Indians surveyed buys designer brands as a status symbol. The number of outlets that these brands have opened up in the country in recent times is a testimony in itself of the increasing fashion consciousness amongst Indians,” said Vatsala Pant, associate director, client solutions, The Nielsen Company.
Though 73% Indians feel that designer brands are usually overpriced for what they are, 35% also believe that designer brands are of a significantly higher quality than standard brands. India stands eighth globally which thinks designer brands are quality products and invest in it despite of the price. About 45% Indians think that only fashion conscious people consider buying designer brands.
“There seems to be a huge market potential for luxury brand line extensions into every corner of the home and office and cross-over between brands and products is certainly an opportunity to drive the demand for these products,” added Pant.
Wednesday, March 26, 2008
Wednesday, March 12, 2008
Launching new brands is getting increasingly difficult
V Ravi, managing director, Indica Research Consumer Insights, presents an expert’s view of the Business Standard Annual Brand Derby results
This year’s findings are starkly contrasting to the findings from previous studies in that corporate rebrandings have stolen the show – with three such rebrandings coming within the top 5 slots. This year’s findings are a testimonial to the emergence of strong attention to corporate rebranding by major corporates and their meticulousness in ensuring ‘great care’ to communicate the rechristened brand with an emotional connect.
We also believe that the findings are also a reflection of the difficulties in creating successful new brand launches (other than Bingo and Maruti SX4) by companies across sectors. This is clearly illustrated by the fact that less than a third of the consumers rated the launch of any new brands other than Bingo and Maruti SX4 as being ‘very successful launches.
The ranking of the various brands in terms of success might lead to an interpretation that the core success factor this year has been high decibel communication. However, quite a few brand launches with high decibel campaigns have not been seen a successful – indicating that high decibel communication does not have a direct correlation with ‘success’ or ‘lack of success’. It is perhaps the simplicity of the communication and the connect with the target audience that has been the differentiator between the winners and also rans.
The study has also thrown up several other additional findings: It seems to have become increasingly difficult for the FMCG sector to create successful new brands – with all new FMCG launches (including brand extensions) excluding Bingo being rated as substantially successful by less than a third of this audience.
Interestingly, despite the strong passion that Indians have for cricket as a game, the Star Cricket channel has been seen as only moderately successful – perhaps a reflection of the absence of major properties involving ‘Indian cricket team’ during the initial year of its launch (a reflection that the passion is largely restricted to India being a participant in the matches and not so much to the game per se).
The emergence of the online market is illustrated by the perceived relatively higher success of an online gaming portal like ‘Zapak’ as compared to brands like Minute Maid, Olay Total Effects or even a Mahindra Renault Logan.
The greater perceived success of i-pill compared to several high profile FMCG brands is testimonial to the a product addressing a strong need - much more than several other launches.
Reliance Fresh emerges as one of the more successful despite facing problems in terms of expansion of its presence across markets – a testimonial to the future of Indian retail?
If this year’s Brand Derby is a reflection of the trends for the future, there are several lessons to be learnt by marketers to create successful brands in an increasingly difficult market place
This year’s findings are starkly contrasting to the findings from previous studies in that corporate rebrandings have stolen the show – with three such rebrandings coming within the top 5 slots. This year’s findings are a testimonial to the emergence of strong attention to corporate rebranding by major corporates and their meticulousness in ensuring ‘great care’ to communicate the rechristened brand with an emotional connect.
We also believe that the findings are also a reflection of the difficulties in creating successful new brand launches (other than Bingo and Maruti SX4) by companies across sectors. This is clearly illustrated by the fact that less than a third of the consumers rated the launch of any new brands other than Bingo and Maruti SX4 as being ‘very successful launches.
The ranking of the various brands in terms of success might lead to an interpretation that the core success factor this year has been high decibel communication. However, quite a few brand launches with high decibel campaigns have not been seen a successful – indicating that high decibel communication does not have a direct correlation with ‘success’ or ‘lack of success’. It is perhaps the simplicity of the communication and the connect with the target audience that has been the differentiator between the winners and also rans.
The study has also thrown up several other additional findings: It seems to have become increasingly difficult for the FMCG sector to create successful new brands – with all new FMCG launches (including brand extensions) excluding Bingo being rated as substantially successful by less than a third of this audience.
Interestingly, despite the strong passion that Indians have for cricket as a game, the Star Cricket channel has been seen as only moderately successful – perhaps a reflection of the absence of major properties involving ‘Indian cricket team’ during the initial year of its launch (a reflection that the passion is largely restricted to India being a participant in the matches and not so much to the game per se).
The emergence of the online market is illustrated by the perceived relatively higher success of an online gaming portal like ‘Zapak’ as compared to brands like Minute Maid, Olay Total Effects or even a Mahindra Renault Logan.
The greater perceived success of i-pill compared to several high profile FMCG brands is testimonial to the a product addressing a strong need - much more than several other launches.
Reliance Fresh emerges as one of the more successful despite facing problems in terms of expansion of its presence across markets – a testimonial to the future of Indian retail?
If this year’s Brand Derby is a reflection of the trends for the future, there are several lessons to be learnt by marketers to create successful brands in an increasingly difficult market place
IBM to launch institute for business value
IBM will launch the IBM Indian Institute for Business Value (IBV) to address the growing demand for high-value services by clients in India.
According to a release issued by IBM today, IBV, IBM’s "business think tank", will create fact-based, industry and service area specific thought leadership materials that will enable clients to realise business value.
"Our India clients, and those keen to enter or expand into the Indian market, view the rapid expansion of the economy as an opportunity to grow their businesses. The challenge they will face is a clear understanding and insight into the industry segments in India. With the launch of IBV in India, IBM intends to provide local insights and better understanding that will enable clients to have a headstart," said K S Raghunandan, director - solutions, IBM India and South Asia.
The first IBV India study will be on "Healthcare India" focusing on required transformation of the Indian healthcare system to improve accessibility, affordability and sustainability, while delivering enhanced value to all key stakeholders. Additional studies from the retail and energy and utility industries will follow this year.
According to a release issued by IBM today, IBV, IBM’s "business think tank", will create fact-based, industry and service area specific thought leadership materials that will enable clients to realise business value.
"Our India clients, and those keen to enter or expand into the Indian market, view the rapid expansion of the economy as an opportunity to grow their businesses. The challenge they will face is a clear understanding and insight into the industry segments in India. With the launch of IBV in India, IBM intends to provide local insights and better understanding that will enable clients to have a headstart," said K S Raghunandan, director - solutions, IBM India and South Asia.
The first IBV India study will be on "Healthcare India" focusing on required transformation of the Indian healthcare system to improve accessibility, affordability and sustainability, while delivering enhanced value to all key stakeholders. Additional studies from the retail and energy and utility industries will follow this year.
Saturday, March 8, 2008
RC&M Delhi, Ogilvy Outreach bag rural marketing awards
RC&M Delhi picked up five trophies and Ogilvy Outreach four at the first ever Rural Marketing Case Studies Awards held at the Leela Kempinski on Wednesday. The awards were hosted by the Rural Marketing Agencies Association of India (RMAAI)."The overall objective (of RMAAI) is to protect and promote rural marketing," said its President, Mr R.V. Rajan.
Among RC&M's five trophies were three golds. The agency won gold for Best Innovative Marketing Initiative for its Toofan case study for Mahindra & Mahindra. The same campaign earned it a gold for Implementation of the Year. RC&M also won for Most Effective Use of Event Marketing for Grameeno Ke Beech.
Ogilvy Outreach won gold in the Most Effective Use of Sales and Promotion and Point of Purchase category for Samajdhar Wheelawati. The agency's remaining three awards were silvers.
Other winners were MART, which was given a Special Jury Award for its HPCL Rasoi Ghar case study in addition to the gold it earned for Best Long-term Rural Marketing Initiative, and ICICI, which won for its No White Spaces Strategy case study in the Best Integrated Rural Marketing Campaign category.
In all, RMAAI received 52 entries in seven categories from 13 agencies and five clients. However, no awards were issued for the Most Effective Use of Direct Marketing (print) category. The awards were judged by Mr Harish Bijoor, Ms Rama Bijapurkar and Mr Sunil Alagh.
"I am extremely happy with the response today," Mr Rajan said. "Our target was 125 (delegates attending). We have achieved it. The quality of response was excellent in terms of entries as well."
Among RC&M's five trophies were three golds. The agency won gold for Best Innovative Marketing Initiative for its Toofan case study for Mahindra & Mahindra. The same campaign earned it a gold for Implementation of the Year. RC&M also won for Most Effective Use of Event Marketing for Grameeno Ke Beech.
Ogilvy Outreach won gold in the Most Effective Use of Sales and Promotion and Point of Purchase category for Samajdhar Wheelawati. The agency's remaining three awards were silvers.
Other winners were MART, which was given a Special Jury Award for its HPCL Rasoi Ghar case study in addition to the gold it earned for Best Long-term Rural Marketing Initiative, and ICICI, which won for its No White Spaces Strategy case study in the Best Integrated Rural Marketing Campaign category.
In all, RMAAI received 52 entries in seven categories from 13 agencies and five clients. However, no awards were issued for the Most Effective Use of Direct Marketing (print) category. The awards were judged by Mr Harish Bijoor, Ms Rama Bijapurkar and Mr Sunil Alagh.
"I am extremely happy with the response today," Mr Rajan said. "Our target was 125 (delegates attending). We have achieved it. The quality of response was excellent in terms of entries as well."
Thursday, March 6, 2008
Indian Premier League team sponsorship is value for money
League needs critical mass
Going through the franchise prospectus, put out by IPL, one can’t help but be awed by the hyperbole put out by BCCI. Paying the BCCI their pound of flesh hasn’t really worked too well in the recent past –– either for Nimbus or Nike. Percept and WSG are still recovering from their attempted forays into monetising BCCI ground sponsorship rights. Not quite the golden goose (that) the BCCI had led them to believe!
Now let’s look at what prospective IPL team owners can look forward to earning on their asset. There are two channels of revenue slated for the Indian Premier League teams, central and local. Central (which the BCCI will sell and share with teams) includes media, sponsorship and suppliers, and local (teams will be responsible for selling) includes things like stadium ticket sales, local sponsorship, concessions, merchandise et al.
It is apparent that until the league picks up a critical mass and builds equity in its local market (anywhere from five to 10 years in an evolved market), the teams will be heavily reliant on central revenues to sustain themselves. Now if a franchise owner bids Rs 220 crore ($55 million) and wins say the Bangalore franchise for 10 years, his annual expense, apart from the Rs 22-crore franchise fee, would be players’ salaries (approx. 15 x $250,000, which is the average player salary announced) thus amounting to Rs 15 crore. Stadium leasing, coaches & official salaries and other miscellaneous expenses annually would amount to another Rs 5 crore, conservatively. That’s a total of Rs 42 crore payout annually.
Now let’s see what can be expected as ROI? Even if the BCCI sells the TV rights for say Rs 750 crore for five years like it claims, that’s Rs 150-crore per annum from TV revenue. Eighty per cent of that, split 8 ways is Rs 15-crore annually per team as its share. If sponsorship and suppliers yield the board another Rs 25 crore annually, 60% of that split eight ways is about Rs 2 crore for each team. A franchise owner can expect Rs 17 crore from central revenue. The Rs 25-crore shortfall on ROI annually will have to be derived from local revenue.
From seven home games with an average sellout of 10,000 tickets priced at an average of Rs 200, the franchisee can expect Rs 1.4 crore. With all other sources adding up to another Rs 3 crore, optimistically, the franchise will stand to lose about Rs 20 crore annually.
A good case study in analysing new leagues and their challenges would be Major League Soccer in the US. Ten years after its launch, it is still losing money but hopes to break even by 2010. An argument could be made that soccer is not the No. 1 sport there like cricket is here, but sports is an evolved format in the US and fans support city teams, go to stadiums and buy merchandise unlike here, so it balances out.
Going through the franchise prospectus, put out by IPL, one can’t help but be awed by the hyperbole put out by BCCI. Paying the BCCI their pound of flesh hasn’t really worked too well in the recent past –– either for Nimbus or Nike. Percept and WSG are still recovering from their attempted forays into monetising BCCI ground sponsorship rights. Not quite the golden goose (that) the BCCI had led them to believe!
Now let’s look at what prospective IPL team owners can look forward to earning on their asset. There are two channels of revenue slated for the Indian Premier League teams, central and local. Central (which the BCCI will sell and share with teams) includes media, sponsorship and suppliers, and local (teams will be responsible for selling) includes things like stadium ticket sales, local sponsorship, concessions, merchandise et al.
It is apparent that until the league picks up a critical mass and builds equity in its local market (anywhere from five to 10 years in an evolved market), the teams will be heavily reliant on central revenues to sustain themselves. Now if a franchise owner bids Rs 220 crore ($55 million) and wins say the Bangalore franchise for 10 years, his annual expense, apart from the Rs 22-crore franchise fee, would be players’ salaries (approx. 15 x $250,000, which is the average player salary announced) thus amounting to Rs 15 crore. Stadium leasing, coaches & official salaries and other miscellaneous expenses annually would amount to another Rs 5 crore, conservatively. That’s a total of Rs 42 crore payout annually.
Now let’s see what can be expected as ROI? Even if the BCCI sells the TV rights for say Rs 750 crore for five years like it claims, that’s Rs 150-crore per annum from TV revenue. Eighty per cent of that, split 8 ways is Rs 15-crore annually per team as its share. If sponsorship and suppliers yield the board another Rs 25 crore annually, 60% of that split eight ways is about Rs 2 crore for each team. A franchise owner can expect Rs 17 crore from central revenue. The Rs 25-crore shortfall on ROI annually will have to be derived from local revenue.
From seven home games with an average sellout of 10,000 tickets priced at an average of Rs 200, the franchisee can expect Rs 1.4 crore. With all other sources adding up to another Rs 3 crore, optimistically, the franchise will stand to lose about Rs 20 crore annually.
A good case study in analysing new leagues and their challenges would be Major League Soccer in the US. Ten years after its launch, it is still losing money but hopes to break even by 2010. An argument could be made that soccer is not the No. 1 sport there like cricket is here, but sports is an evolved format in the US and fans support city teams, go to stadiums and buy merchandise unlike here, so it balances out.
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