18 June, 2009

Consumer “Driven”

After a long day’s work, I drove towards the city – to UB City; the most upmarket place in town with the likes of Louis Vitton, Zegna, Ferragamo and Rolex welcoming you from the entrance; a property that belongs to Mr. Vijay Mallya, the owner of the UB Group – from Breweries to Vineyards, from Race winning Horses to Yachts, from Force India Formula One Car Racing team to Kingfisher Airlines, he owns a long list of popular companies and marquee brands. No, I wasn’t there to shop, just to meet an old buddy of mine. After my friend arrived, we decided to move on to some Beer as it was already past 7pm. Hopped in to a place by the name Shiro – a gigantic Buddha statue in the middle of the restaurant that had a ceiling at over 10 meters! Wow. And the lighting and other aesthetics that have been so carefully designed by the people behind the project was quite appreciable. They have an area that’s covered (climate controlled, ofcourse) and an open area that’s part of the terrace, overlooking the beautiful surroundings of VM Road disecting Lavelle Road.

We choose to sit closer to the Bar with nice and comfortable wooden chairs while the well spread out seating area was meant for larger groups, we thought. Then we turned to the Bar man and asked for Beer; my friend said Carlsberg and I said Blue. He quite didn’t catch it for a couple of times until I said Kingfisher Blue. With a wide grin on his face, he replied that they don’t keep Kingfisher. I was shocked! At Mr. Mallya’s home ground, there is a restaurant that doesn’t stock and sell Kingfisher… India’s most sold Beer by quantity. So we ordered Carlsberg and started enjoying the beer, the company and the evening. But something was running at the back of my mind. Will I return to this place again, although they don’t serve my favorite Beer?

As I write this almost a day after, I still don’t have an answer – if people like me, if consumers like me would return to a place that doesn’t stock what they want but would rather pursue them to have something similar. I am not so much an expert about Beer-making that I could explain now in length about the origin, the process and the taste of various brands of Beer but what intrigues me is this – are consumers looking for just an emotional gratification while they buy or consume brands or are there some rational reasons attached to it as well. If Kingfisher was the most famous Beer and our state Karnataka being among the biggest markets in the country (and Bangalore leading the pack within the state), then how was it that the restaurant was almost full when we were leaving the place at 9pm? Was the environment, the ambience and the food so great that people were willing to desert their favorite Beer Brand for some other alternatives?

The logic that consumers visit such places not to get drunk (a pint is INR 180.00 ie., USD 4 and the food is mind-blowingly high on price notwithstanding the quality) but just to spend some good time sounds crazy, if not surprising. On a weekday, if that’s the crowd, then one could imagine how the place looks on a weekend. So, are such consumers (not just to this place) visiting their favorite places only to spend “time”? Then what value does a Brand carry? Somebody said Brand Loyalty? Naaah.

Let’s not confuse loyalty over popularity and availability. Loyalty would be built only when the Brand was available. Obviously. And it is possible to build Loyalty especially in a controlled market, where entry to external brands is not just difficult but impossible at times due to government guidelines. And if the consumer doesn’t get their favorite Brand more than twice or thrice, would they switch over to some other alternative? Whats interesting here is that consumers would continue to buy alternatives only till such time they don’t get their favorite ones. Or they may get used to newer Brands because of what they offer. So, availability leads to popularity which may result in Loyalty. I doubt if it would work in any other direction.

In this case, while comparing attributes, KF Blue and Carlsberg score more or less the same. But would someone switchover to Carlsberg in future leaving their favorite brand behind? May be not. However, the first time the Brand gets to interact with a consumer is when the decision is made. To use it again or not.

It was quite similar two decades ago when there were only three cars in India, forget variants – Ambassador, Fiat Padmini and Maruti 800. Today, they still exist. With a decent single digit market share, but they just “exist”. Possible in a country like India where the ever growing consumerism ensures that everytime a segment upgrades, there is another segment that fill their previous profile. And today, while Hyundai rules the roost, Maruti is still quite close and other brands such as Honda, Toyota, Fiat and GM are household names.

Cut to a Retail store: would consumers still come to a store that doesn’t retail their favorite Brands across categories? While private store labels give a run for the money to the domestic and international biggies, the consumers know exactly what they want. No wonder, private labels do not contribute over 20% to the store’s turnover. Consumers would come to the retail store only looking for their favorite brands. And may walk empty hand if they don’t find their choices. Convincing them with alternatives is not just through the ambience and environment – the product attributes must live up to their expectations. So, the equation runs as availablity -> popularity + Attributes = Loyalty. After all, Brands are expected to Drive Consumers into the stores, not drive out! Cheers.

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