Friday, August 25, 2006

Product Sabotage & Market Cannibalization

Marketing is war! Be it within the organization or within the market segment or within the market on a generic level. There is a battle of the brands to get mindspace, shelf space, top of the mind recall, impulse purchase points and anything possible to make the consumer lift the product off the shelf and place it at a point of consumption in their personal lives. There are many ways that marketers achieve their desired results, be it in a legitimate way or sometimes borderline cases where the truth is bent so much that it makes any meandering river appear smooth as a well polished piece of wood.

Advertising has been the primary method for product promotion. Over the top advertising, online, offline be in a straight line, or not so straight line, products are advertised throughout the city, street or country. The popularity of the product and the places where all the products are advertised meets the eye at every nook and corner. Things right from pin to pianos are advertised in all media possible: electronic, print, radio television etc. This is the form that has the marketer standing and shouting from the roof tops about discounts and more discounts. Look at the strategy of any of the airlines. They shout and advertise about low airfares, and how these airfares are cheaper than the train fares, but what they don’t add is the fact that “other charges are extra”- namely a surcharge, tax and others. So what is so great about advertising, very specifically, it gives just the highlights of the product. However miniscule the “benefit”, that is built upon. Obviously, that is the logical explanation; you do not stand on rooftops and shout about the defects of the product.

It has been a trend of late, instead of moving from a product appeal to emotional appeal, thereby taking the consumers through the “advertising life cycle”, marketers are attempting to bypass the whole process by releasing emotionally appealing advertising first. This attempt, I feel, seems to be back firing big time, simply because, in advertising, like in kindergarten, consumers need to be hand held till they can stand on their own two feet and decide. There is a popular belief that the advent of the internet has made the process of purchase and the entire purchase cycle shorter, however, in a country like India, where the PC penetration is still a mere 14 per 1000 and the internet penetration being about 5 per 1000 [1] , so how does this contribute to the “increased” awareness? We still have 995 people out of every 1000 still basing their decisions on the advertisements they see on the various media, so I believe there needs to be a serious re-look at the advertising methods being adopted. When a brand connects with the customer on the emotional level, leaving out the first phase of “product enlightenment”, the customers are left vulnerable. Much like Abhimanyu’s attempt to breach the Chakravyuha. He was successful in breaking in, but unable to escape, breathed his last, in a vain attempt to free himself. Similarly, moving advertising onto the emotional level, by by-passing the first few levels, will leave the consumer highly susceptible to counterfeits and “pass-offs”, as the knowledge levels of the product are still in the infancy and the consumer has “bonded” with the product already, the window of opportunity to strike and dupe unsuspecting victims is evident at this stage.

Marketing is more than advertising, according to the marketing text-books, the product, price, promotion and place or the new mantra of creating value, communicating value and delivering value. So the value is created by the product team, this value is then communicated via the marketing team and finally the sales and distribution team delivers the value. However, sometimes value needs to be “destroyed” in order to build value. This means reducing the market share on one product in order to increase the market share of another product. Else, the introduction of flanker brands does just that. The market is captured by the fact that the main brand exists and the flanker brands, basically watered down versions of the main brand, work towards driving out competition. When car companies launch cars to compete in certain segments there is inevitably a spill over to another segment wherein there is competition with pre-existing models. Perfect examples will be high end models in one segment and low end models of the next higher segment.

There is another interesting phenomenon that seems to be getting noticed these days: Product sabotage [2] . Essentially, this means, pushing higher margin products, and keeping the lower margins off the “menu card” so to speak. Sabotaging the product, is also done in order to make the consumer upgrade to the next higher one. One example cited was the IBM printer example, in which IBM inserted chips into the printers in order to slow them down. Starbuck’s example of not featuring the cheaper ones on the menu, because the profitability on those are lower.

So what does all this translate to?

Consumers are becoming more aware that these things happen, more so, the ability of the consumer not to be taken for a ride is definitely reducing because of the internet. Developed nations such as Japan, the US, Europe and others where the PC penetration is high and the internet penetration is even higher, the ability to deliver information directly to the target audience is a growing challenge. This will be a constant battle in order to provide direct campaigns that ultimately resort to a higher convertibility in terms of sales.


Wednesday, August 23, 2006

My mistaken identity as a Pimp!

Well, I am really pissed. the past few days, my life seems to be getting tormented by morons who dont seem to have the balls to go speak to women, or they just dont seem to have balls, full stop. I really dislike it when people use my name to get to knw others, without my consent. I dont mind it if i personally introduce them, however, when people take liberties such as this, it really ticks me off. today i got a call:
Caller: hey man, how you doing?
ME: good, wassup?

Caller: hey, this friend of ours was saying you know this girl.
Me: yeah, So.

Caller: Well, there is this friend of mine who wants to know which school she studied in.
me: What? (complete disbelief, considering im doing some really important work on news. bbc.

Caller: Well, this friend of ours said that you know this girl, and I wanted to know if you can give me that information.
Me: Can i speak to this friend of ours?
Friend: these guys are mad.

Me: duh! huh! they work for SW cos, what DO you expect?

Caller: maan, can you help.
Me: No.
Friend: NO, good!
Me: Tell them if they wnat to know, let them Talk.
Caller: *click*

I mean, gwad! whats up wth the world today! Do I look like a pimp or something? i mean, AAARRRRGGGGHHHHHH!!!!
two days in a row: something tells me, tomorrow IS NOT going to be different!

Brahadeshwara Temple!

One of the most famous landmarks of Southern India, The brahadeshwara temple is a quentisential display of Cholan Art form. Its sanctum sanctorium (the inner shrine) is built out of a single stone, thereby making it the largest monolithic structure in the world. It is also one of the first sites in southern india to come under the UNESCO banner as a heritage site. The unique structure of the sanctum sanctorium is such that the shadow of the top never falls on the ground. It is also the ONLY temple in the world where the Sanctum Sanctorium is taller than the entrrance. In traditional temple architecture, the entry gopuram is taller than the main gopuram, however, in this temple (and unique only to this temple) it is the other way. Also, this is one of the few temples dedicated to Shiva.

Lovely place. You should visit it if you have the time.

Monday, August 21, 2006

The future of the internet

There seems to be a serious amount of consolidation that appears to be happening over the internet. Initially, there was the client - server architecture that had the world blown with its advanced technology at the back end and "dummy" terminals at the front end. But then, gradually, as people became pressed for time, more and more applications started moving to the desktop, and there were more powerful and faster computers, and the transfer rates within the computer did not keep up with the rates of the network. That means, the network rates were much slower, and it reduced over distance. So the cost of transferring data over longer distances seemed to be increasing. However, the size of data also seems to be on the rise. So, what does one do?

Move everything online. That is on the server, yet running off the client. Perfect example Ajax. Heavy application running off the server and page gets dynamically updated without referring back to the server on the desktop unit itself. Now how’s that for technology.

I feel that IT is going through the same process that the manufacturing companies took. First the bigger is better, then bigger is not better, then better is bigger, and then better is better.

Big companies came in, the dot com boom, the dot com bust, the dot com rise. in processing, things are getting smaller, like manufacturing, batch sizes are decreasing, for optimization on the production line. more and more items are getting intergrated.

the VoIP wars seem to be heating up. VoIP of voice over IP, heralded in a new form of long distance communcation. with the internet speeds icnreasing very fast, packet sizes are becming smaller, and more packed. MPLS, now moves away from ATM and Frame Relay networks, offering high avaiability networks that can run voice and data and have QoS installed on it, now HOW cool is THAT! Skype's tryst with the internet seems to be taking beatings in all quaters. Voice quaility is good on skype, and the only downside was the free skype to skype calls. that means, unless skyps esits, its paid calls for a skype out connection. The gizmo project came out with something "better" you could call your contacts off-net numbers for free. but that is so cunning that it does not seem to work for me, even though I have fulfilled all the pre-requsit requirements. Very deceptive! well, the Behemoth of the internet google is slowly making inroads. I fear that soon, they will rule the internet, an if they decide to start charing for their service, god help the others!!! :)
anyways, skype's "unique" peer-to-peer protocol, which suspect was improved on from Kazaa days is not the usual SIP/SIMPLE protocol that is deployed by gizmo. It has its own propritary protocol that it is riding on. Now with google getting into the instant communcation space using jabber, i seriously think things are going to get heated up. the enterprise space seems to be dominated currently with microsofts, ibms and other large players. OpenSource seems to have taken a backseat, mainly due to support issues. Now, that I am sure will be something that is slowly growing out. The Ubuntu forum seems to be the a brillinat place to be able to get information, with the pool of knowledge of users giving rookies a fair taste of seemless intergration. Google's promotion of Jabber, a protocol used for presence and IM. i first used it on apple talk. found it so cool. if you log into you gmail, the same thing pops up and shows you if your contact is online or not. imagine now moving this to a mobile unit. if I look at my mobile phone, I can see if my friends are online, and send then an sms/ instant message.

I think the entire shift is towards mobility, information and speed. Wimax has been deployed, now with a wimax enabled phone, you can log into your phone, surf, and make calls, voip as well as via the cellular network.

wimax will have the ability to stream video and audio with bandwidths of Mbps as opposed to slower than 33.6 Kbps on a gprs.

the future is wide open!
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