Analysis: Talk To The Consumer

<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[<p><p align="justify"><span class='dropthecap'>P</span>ortfolio rationalisation is an issue facing many large corporations as they grow exponentially — especially when this growth is inorganic, through mergers and acquisitions at a global level. The resultant organisation often has competing brands in its portfolio, offering similar benefits and value at usually identical price points. Shareholder value, and sheer management priorities, dictates the decisions to cull out slower moving brands. Therefore, in 2000, we saw Unilever realising that out of its 1,600 brands, only 100 contributed 75 per cent of the turnover. It decided to narrow down to a more manageable 400 power brands. Or in 2007, when Nestle realised it was making 130,000 variations/SKUs of its brands, and 30 per cent were not making money, it put in place an aggressive plan to jettison weaker brands and simplify the organisation. More recently, Kraft, after acquiring Cadbury's, is in all likelihood taking a close look at the brand portfolio.<br /><br />But what happens to the consumer in such drastic ‘slimming'? The case of Jahnvi Pandya shows that they are disappointed, confused, and dissatisfied.<br /><br />One issue is what would have happened to Stepp's consumer base? What brand would they have shifted to? Would they really have ‘migrated' to Comma, as the management would have hoped? This is unlikely because, as we all know, consumers buy not just the product but buy into the brand. The most famous illustration of this is the case of Coke versus Pepsi — Coke loyalists do not easily switch to Pepsi, even though innumerable blind tests show that consumers cannot distinguish easily between the two. If Stepp made its consumers feel they were making a rational no-nonsense type of decision, they would not get the same feeling with Comma. Therefore, the management decision to migrate the bar product of Stepp under the Comma name would carry some consumers with it, but usually only in proportion to its existing market share.<br /><br />But Jahnvi is not a Stepp consumer, she is a Comma loyalist. So why was she so unhappy? It is less about seeing the ‘Stepp' branding on a Comma pack — her dissatisfaction is caused by the product quality she experienced. There are many brands that introduce variants up and down the value chain — take a look at the number of variants under Colgate or Whisper or Fair&amp;Lovely. This is when the question of brand stretch and elasticity arises; brands need to soul search and decide what defines them, and then keep certain core values consistent. With Comma, even if ‘premium-ness' is not a core value, the corresponding core value of high or better quality needs to be maintained. So if Comma introduces a detergent bar, it needs to correspond to the same quality wash experience as before — and it definitely should not melt and leave blue stains on clothes!<br /><br />The related issue here is not just product quality, but also Jahnvi's confusion at the proliferation of Commas she saw on the shop shelf. The choices facing her did not create delight, but actually overwhelmed her.<br /><br />How much choice do consumers really want is a hot topic of discussion today. A new corporate mantra that is emerging — not just because of shareholder value — is to narrow down the choices as they only lead to confusion. A famous case is the ‘jam study' done by Sheena Iyengar of Columbia University, described extensively in her book <em>The Art Of Choosing.</em> Experimenting with a ‘tasting booth' in a store they found that when a multitude of jam flavours were displayed for sampling, only 3 per cent customers went on to redeem a coupon and make a purchase; whereas when a limited assortment of six flavours was offered for tasting, redemption jumped to 30 per cent. This was validated by observing the consumers in the ‘jam aisle' of the store — the ones who were offered more choice were more confused, and found not buying a simpler decision.<br /><br />The explosion of choice gets all the more pronounced in the modern shopping environment — even classic neighbourhood stores have converted to an open format, where consumers walk through narrow aisles and pick up their purchases. This ‘self service' means that they need to pick up packs and evaluate them — after they have arrived at a brand decision, they still need to distinguish between the different variants and price points. And the only marketing or communication tool at this point is the pack itself.<br /><br />Therefore, at the most basic level, this case is about packaging design. Jahnvi Pandya did not realise that she was picking up detergent bars instead of detergent powder. Her anger and disappointment is also likely to be a reaction to cover how foolish this made her feel, resulting in her sense of betrayal from the brand. The makers of Stepp and Comma need to relook at the packaging graphics and elements, and ensure that they are ‘talking' to consumers.<br /><br /><em>Atishi Pradhan is the account planning head, Delhi and South, at Contract Advertising<br /></em></p> <script type="text/javascript"> var intro = jQuery.trim(jQuery('#commenth4').text()) var page = jQuery.trim(jQuery('#storyPage').text()) if (page.indexOf(intro) < 0) { jQuery('#commenth4').attr('style', 'display:block;') } </script> (This story was published in Businessworld Issue Dated 22-11-2010)