NMIMS NJM Buzz June 2011

JUNE 11Vol. III Issue I

When my fist clenches, crack it open

Before I use it and lose my cool

When I smile, tell me some bad news

Before I laugh and act like a fool

- The Who

When we come to the end of one year of our ever so

hyped MBA, there is that sudden surge of 'knowledge

acknowledgement' that our brain generates waves

of. All of a sudden on the first day of the last year of

MBA, we feel we have somehow managed to grasp

and maneuver our way through those coils and coils

of matrices and curves and chains the fathers and

grandfathers of Marketing have plotted years earlier.

And if it does not happen on the aforementioned day,

it definitely kicks in when we first see 'fresh' fruit.

Somehow, it does happen. Somehow it should not.

When we embarked on the expedition of starting

work on this issue, before any of the above

unfortunate (un)realizations occurred, we were glad

to get a kick, though of a different kind. We realized

that the matrices and curves and all of those

creeping things on paper mean just that much less,

more so as each decade passes. So we thought it

best to simply see what the future might just hold,

with a passing glance in the rear view mirror. Whether

it be trying to untangle the millions (zillions you say?

Maybe. The count never seems to end) of nerves in

the head and figure out just what goes on there, or

trying to figure out why would someone chop off toes

to wear those Jimmy Choos, or how the fundamental

definition of food is taking a blurred form, we tried to

Neelotpal Shukla

Nishchai Nevrekar

Gaurav Modi

Rachita Behl

Kushal Mehta

Krishnakant Jonnalgadda

Tushar Kumar

Nandini Kapur

Pawas Soni

Naresh Chandak

Neha Talwar

Puneet Aggarwal

Team

2 | Buzz - The Markazine | Jun 2011 3 | Buzz - The Markazine | Jun 2011

Ed Speak

The Eds

Kushal Mehta

Designed by

Nishchai Nevrekar

unlock that whimsical romance of nerve and

nerves, and just extend our period of

learning, albeit beyond classes this time.

We wish you just tag along. The year is just

getting started !

Trendz

The power of Co-Creation 4MICA

Blurring Food Categories 8NMiMS, Mumbai

Marketing to the High Net Worth Customer 12NMiMS, Mumbai

Cover Story

Its all in the Mind 18

Gyaan

Social Marketing 26IRMA

Crowd Sourcing 30NM Dalmia

Feature

Euphoria & NjM Week 34

Premire

Namaste StarBucks 22GIM

Contents

When my fist clenches, crack it open

Before I use it and lose my cool

When I smile, tell me some bad news

Before I laugh and act like a fool

- The Who

When we come to the end of one year of our ever so

hyped MBA, there is that sudden surge of 'knowledge

acknowledgement' that our brain generates waves

of. All of a sudden on the first day of the last year of

MBA, we feel we have somehow managed to grasp

and maneuver our way through those coils and coils

of matrices and curves and chains the fathers and

grandfathers of Marketing have plotted years earlier.

And if it does not happen on the aforementioned day,

it definitely kicks in when we first see 'fresh' fruit.

Somehow, it does happen. Somehow it should not.

When we embarked on the expedition of starting

work on this issue, before any of the above

unfortunate (un)realizations occurred, we were glad

to get a kick, though of a different kind. We realized

that the matrices and curves and all of those

creeping things on paper mean just that much less,

more so as each decade passes. So we thought it

best to simply see what the future might just hold,

with a passing glance in the rear view mirror. Whether

it be trying to untangle the millions (zillions you say?

Maybe. The count never seems to end) of nerves in

the head and figure out just what goes on there, or

trying to figure out why would someone chop off toes

to wear those Jimmy Choos, or how the fundamental

definition of food is taking a blurred form, we tried to

Neelotpal Shukla

Nishchai Nevrekar

Gaurav Modi

Rachita Behl

Kushal Mehta

Tushar Kumar

Nandini Kapur

Pawas Soni

Naresh Chandak

Neha Talwar

Puneet Aggarwal

Team

Ed Speak

The Eds

Kushal Mehta

Designed by

Nishchai Nevrekar

unlock that whimsical romance of nerve and

nerves, and just extend our period of

learning, albeit beyond classes this time.

We wish you just tag along. The year is just

getting started !

Trendz

The power of Co-Creation 4MICA

Blurring Food Categories 8NMiMS, Mumbai

Marketing to the High Net Worth Customer 12NMiMS, Mumbai

Cover Story

Its all in the Mind 18

Gyaan

Social Marketing 26IRMA

Crowd Sourcing 30NM Dalmia

Feature

Euphoria & NjM Week 34

Premire

Namaste StarBucks 22GIM

Contents

Not long back, there was a time when there existed

only a few brands in each product category, thus

giving the consumer limited options to purchase

from. In just a decade, a time has come when there

exists innumerable brands in almost every product

category, and the consumer is in absolute quandary

regarding how to make the best selection from

among an ocean of choices. Not just that, the world

has seen a boom in the media industry in terms of its

reach to the audience, giving the marketers a long

awaited means of promotion that is cheap, effective

and covers a majority of the target audience. Thus

the industry saw a sharp rise in the advertising

spends of majority of the organizations and the

audience was bombarded with advertisements from

all sides; be the through the television, the radio, the

newspaper, magazines or out-of-home media. This

has further confused the already confused audience.

Thus, in order to break the clutter of advertisements,

the marketing strategy of organizations has seen a

complete metamorphosis in the past few years, and

one of the most effective of them all is customer

engagement via co-creation.

Customer co-creation (a term coined by Venkat

Ramaswamy and C.K. Prahalad) is a concept of

customer engagement in which the brand and the

customer work together for creation of value by the

brand for the customer (Gouillart, The Power of Co-

Creation). In co-creation, a brand asks its

customers as to what they want from

the brand, and then makes them

partners in creating the

same. In most cases, co-

creation is a win-win

situation for the brand and

the customers because the

customers help the brand know

precisely what they want, and in this

process the brand creates something they can

be sure about.

A classic example of customer engagement

through co-creation is that of Lays from Frito

lay. Lays came out with an idea on

customer engagement called

'Give Us Your Dillicious Flavour'.

In this case, Lays came out with

a contest in which consumers

had to suggest new flavours for

lays. Lays would then select four

best flavours and launch them in the

Indian market. As one might predict, the

campaign cum contest was a huge success. It

increased their brand recognition, customer

loyalty and word of mouth publicity.

Another classic example of co-

creation is that of Starbucks

coffee. Starbucks launched a

forum called 'My Starbucks

Idea' which is an online

community of the Starbucks

customers. The reason of the

launch of this platform is to enable

them to know their customers well and to

understand their psyche. The customers give

their idea on a range of topics like - how the

waiters should be dressed?, should they wear

nameplates?, making ice cubes out

of coffee, kind of food served,

varieties of coffee served, the

interior of the cafes, etc. Then

these ideas are voted upon by

other customers and the best

ideas are rewarded. Not just this,

these ideas are even implemented

in the Starbucks cafes. This way the

management comes to know for sure that what

Sharad Gaur

Is a First year Post-Graduate

Management student at Mudra

Inst i tute of Communicat ions

Ahmedabad (MICA), pursuing Post

G r a d u a t e D i p l o m a i n

Communications Management.

He belongs to Jaipur and has done

his graduation from the Institute of

Te c h n o l o g y, B a n a r a s H i n d u

University. After working in the

software industry for 2 years he

joined MICA to specialize in branding.

His interests include outdoor sports,

photography and trying out new

cuisines.

Author

In order to break the clutter of advertisements, the

marketing strategy of organizations has seen a

complete metamorphosis in the past few years, and one

of the most effective of them all is customer

engagement via Co-Creation

The Power of

Co-Creation

TRENDZ

Not long back, there was a time when there existed

only a few brands in each product category, thus

giving the consumer limited options to purchase

from. In just a decade, a time has come when there

exists innumerable brands in almost every product

category, and the consumer is in absolute quandary

regarding how to make the best selection from

among an ocean of choices. Not just that, the world

has seen a boom in the media industry in terms of its

reach to the audience, giving the marketers a long

awaited means of promotion that is cheap, effective

and covers a majority of the target audience. Thus

the industry saw a sharp rise in the advertising

spends of majority of the organizations and the

audience was bombarded with advertisements from

all sides; be the through the television, the radio, the

newspaper, magazines or out-of-home media. This

has further confused the already confused audience.

Thus, in order to break the clutter of advertisements,

the marketing strategy of organizations has seen a

complete metamorphosis in the past few years, and

one of the most effective of them all is customer

engagement via co-creation.

Customer co-creation (a term coined by Venkat

Ramaswamy and C.K. Prahalad) is a concept of

customer engagement in which the brand and the

customer work together for creation of value by the

brand for the customer (Gouillart, The Power of Co-

Creation). In co-creation, a brand asks its

customers as to what they want from

the brand, and then makes them

partners in creating the

same. In most cases, co-

creation is a win-win

situation for the brand and

the customers because the

customers help the brand know

precisely what they want, and in this

process the brand creates something they can

be sure about.

A classic example of customer engagement

through co-creation is that of Lays from Frito

lay. Lays came out with an idea on

customer engagement called

'Give Us Your Dillicious Flavour'.

In this case, Lays came out with

a contest in which consumers

had to suggest new flavours for

lays. Lays would then select four

best flavours and launch them in the

Indian market. As one might predict, the

campaign cum contest was a huge success. It

increased their brand recognition, customer

loyalty and word of mouth publicity.

Another classic example of co-

creation is that of Starbucks

coffee. Starbucks launched a

forum called 'My Starbucks

Idea' which is an online

community of the Starbucks

customers. The reason of the

launch of this platform is to enable

them to know their customers well and to

understand their psyche. The customers give

their idea on a range of topics like - how the

waiters should be dressed?, should they wear

nameplates?, making ice cubes out

of coffee, kind of food served,

varieties of coffee served, the

interior of the cafes, etc. Then

these ideas are voted upon by

other customers and the best

ideas are rewarded. Not just this,

these ideas are even implemented

in the Starbucks cafes. This way the

management comes to know for sure that what

Sharad Gaur

Is a First year Post-Graduate

Management student at Mudra

Inst i tute of Communicat ions

Ahmedabad (MICA), pursuing Post

G r a d u a t e D i p l o m a i n

Communications Management.

He belongs to Jaipur and has done

his graduation from the Institute of

Te c h n o l o g y, B a n a r a s H i n d u

University. After working in the

software industry for 2 years he

joined MICA to specialize in branding.

His interests include outdoor sports,

photography and trying out new

cuisines.

Author

In order to break the clutter of advertisements, the

marketing strategy of organizations has seen a

complete metamorphosis in the past few years, and one

of the most effective of them all is customer

engagement via Co-Creation

The Power of

Co-Creation

TRENDZ

farmers could get the best deal for their produce,

while ITC could get the best quality ram material

for further processing and sales. The concept of

e-choupals was so successful that today ITC has

more than 6500 e-choupals and nearly 150

hubs, which serves almost 40,000 villages and

four million farmers across 10 Indian states

(Gouillart, Building the Co-Creative Enterprise,

2010).

From the above discussion, we see the power of

co-creation if implemented properly. It becomes

a very valuable proposition for the brand as well

as the consumers. It saves a brand a lot of

resources which the brand must have otherwise

spent in finding out what the customer needs. At

the same time, it benefits the consumers as they

get the desired product from their cherished

brand. Not just this, customer engagement

serves a bigger purpose.

A few of the benefits are mentioned below:

! Satisfied customers results in customer

retention.

! Word of mouth publicity for the brand.

! Acquisition of more customers due to

awareness and WOM publicity.

! Better products in the market for the

consumers.

! More competition in the market, hence

better service and product quality.

! Check on any bad word of mouth.

! Direct contact with the consumer for

suggestions and grievance solutions.

Thus, we can say that customer engagement and

customer co-creation are the need of the hour if

marketers have to be successful in successfully

delivering value for the customers in order to

establish credibility and trust in the market as

well as be profitable on a long run.

kind of a change the customers want.

!ITC e-choupal is perhaps the most

successful Indian examples of co-creation.

'e-choupals' are internet kiosks in rural areas

within walking distance of many villages.

Each kiosk provided information in local

dialect on daily weather forecast, crop prices,

advice on farming methods; email service

that let farmers interact with scientists at

agricultural universities, technical people at

ITC, fellow farmers; access to land records,

health and educational services and

in format ion f rom NGOs on la test

developments in cattle breeding and crop

seeds. Each kiosk was managed by a fellow

head farmer called 'snachalak' who publicly

swore allegiance to them. These kiosks were

further connected by hubs called choupal

saagars. Each choupal saagar connects

about 40-50 e-choupals. In contrast to

mandis, they employ electronic weighing

machines, conduct objective quality testing

and pay farmers in full on the spot. Thus

Customer engagement and customer co-creation are

the need of the hour in order to establish credibility

and trust in the market as well as be profitable on a

long run

TRENDZ

farmers could get the best deal for their produce,

while ITC could get the best quality ram material

for further processing and sales. The concept of

e-choupals was so successful that today ITC has

more than 6500 e-choupals and nearly 150

hubs, which serves almost 40,000 villages and

four million farmers across 10 Indian states

(Gouillart, Building the Co-Creative Enterprise,

2010).

From the above discussion, we see the power of

co-creation if implemented properly. It becomes

a very valuable proposition for the brand as well

as the consumers. It saves a brand a lot of

resources which the brand must have otherwise

spent in finding out what the customer needs. At

the same time, it benefits the consumers as they

get the desired product from their cherished

brand. Not just this, customer engagement

serves a bigger purpose.

A few of the benefits are mentioned below:

! Satisfied customers results in customer

retention.

! Word of mouth publicity for the brand.

! Acquisition of more customers due to

awareness and WOM publicity.

! Better products in the market for the

consumers.

! More competition in the market, hence

better service and product quality.

! Check on any bad word of mouth.

! Direct contact with the consumer for

suggestions and grievance solutions.

Thus, we can say that customer engagement and

customer co-creation are the need of the hour if

marketers have to be successful in successfully

delivering value for the customers in order to

establish credibility and trust in the market as

well as be profitable on a long run.

kind of a change the customers want.

!ITC e-choupal is perhaps the most

successful Indian examples of co-creation.

'e-choupals' are internet kiosks in rural areas

within walking distance of many villages.

Each kiosk provided information in local

dialect on daily weather forecast, crop prices,

advice on farming methods; email service

that let farmers interact with scientists at

agricultural universities, technical people at

ITC, fellow farmers; access to land records,

health and educational services and

in format ion f rom NGOs on la test

developments in cattle breeding and crop

seeds. Each kiosk was managed by a fellow

head farmer called 'snachalak' who publicly

swore allegiance to them. These kiosks were

further connected by hubs called choupal

saagars. Each choupal saagar connects

about 40-50 e-choupals. In contrast to

mandis, they employ electronic weighing

machines, conduct objective quality testing

and pay farmers in full on the spot. Thus

Customer engagement and customer co-creation are

the need of the hour in order to establish credibility

and trust in the market as well as be profitable on a

long run

TRENDZ

Call it the two-in-one phenomenon; brands are

blurring food category boundaries by positioning

their products to be relevant in multiple categories.

Companies are using innovations, packaging

changes and cross-category placements to extend

the same product to different categories. Brands are

not trying to take on the well-entrenched category

leaders directly but are instead broadening the

domain within which their brand plays. Changing

lifestyles and increased overseas travel has

introduced new flavors and textures into the Indian

palate. And brand extensions are catering to this

need. Everyone is trying to solve the dichotomy of

taste and health today.

Biscuit OR Chocolate ?

Nestl and Lindt are among the top confectionery

players who have blurred the distinction between

chocolate and biscuits by launching biscuit products

of their own. Nestl has recently sought to expand its

Smarties brand and gave it a boost by launching

Smarties cookies. Ferrero also launched its first non-

chocolate-based snack under the Kinder brand in the

form of Kinder Happy Hippo long back in

2002. This is made up of a hippo-shaped

wafer shell which is filled with hazelnut and

.

Snack Bar OR Chocolate?

Snack bars typically compete with chocolate

bars by positioning themselves as a tasty but

healthy alternative. This is the case across all

sectors including granola bars, which focus on

health and naturalness; energy bars, which

focus on functionality; and breakfast bars,

which play on the link with breakfast cereals.

This is also the case with other snack bars,

including sesame seed bars in Eastern

milk cream

Europe, and fruit bars in the UK and the US.

Even though snack bars are increasingly

covered in sugar and chocolate in order to make

them tastier, the inclusion of wheat flakes, nuts

and other cereal ingredients contributes to their

healthier image. Conversely, bar the specialist

slimming or sports products, these bars are no

longer viewed as too "saintly" to be enjoyed as a

snack. Such cross-category marketing is largely

possible at modern retail outlets where

consumers have direct access to the category

bays.Prasad Madhusudan

Is a 1st Year MBA student at NMIMS,

Mumbai. He has worked for Deloitte

in the IT sector. His interests are

music, singing & painting. He is

planning to take up Marketing as his

Majors.

Author

Brands are not trying to take on the well-

entrenched category leaders directly but are

instead broadening the domain within which

their brand plays

Blurring Food

Categories Multiple positioning across

segments

TRENDZ

Ferreros

non chocolate based snack

Britannias Choco Decker

Call it the two-in-one phenomenon; brands are

blurring food category boundaries by positioning

their products to be relevant in multiple categories.

Companies are using innovations, packaging

changes and cross-category placements to extend

the same product to different categories. Brands are

not trying to take on the well-entrenched category

leaders directly but are instead broadening the

domain within which their brand plays. Changing

lifestyles and increased overseas travel has

introduced new flavors and textures into the Indian

palate. And brand extensions are catering to this

need. Everyone is trying to solve the dichotomy of

taste and health today.

Biscuit OR Chocolate ?

Nestl and Lindt are among the top confectionery

players who have blurred the distinction between

chocolate and biscuits by launching biscuit products

of their own. Nestl has recently sought to expand its

Smarties brand and gave it a boost by launching

Smarties cookies. Ferrero also launched its first non-

chocolate-based snack under the Kinder brand in the

form of Kinder Happy Hippo long back in

2002. This is made up of a hippo-shaped

wafer shell which is filled with hazelnut and

.

Snack Bar OR Chocolate?

Snack bars typically compete with chocolate

bars by positioning themselves as a tasty but

healthy alternative. This is the case across all

sectors including granola bars, which focus on

health and naturalness; energy bars, which

focus on functionality; and breakfast bars,

which play on the link with breakfast cereals.

This is also the case with other snack bars,

including sesame seed bars in Eastern

milk cream

Europe, and fruit bars in the UK and the US.

Even though snack bars are increasingly

covered in sugar and chocolate in order to make

them tastier, the inclusion of wheat flakes, nuts

and other cereal ingredients contributes to their

healthier image. Conversely, bar the specialist

slimming or sports products, these bars are no

longer viewed as too "saintly" to be enjoyed as a

snack. Such cross-category marketing is largely

possible at modern retail outlets where

consumers have direct access to the category

bays.Prasad Madhusudan

Is a 1st Year MBA student at NMIMS,

Mumbai. He has worked for Deloitte

in the IT sector. His interests are

music, singing & painting. He is

planning to take up Marketing as his

Majors.

Author

Brands are not trying to take on the well-

entrenched category leaders directly but are

instead broadening the domain within which

their brand plays

Blurring Food

Categories Multiple positioning across

segments

TRENDZ

Ferreros

non chocolate based snack

Britannias Choco Decker

Britannia

The biscuit maker introduced Treat Choco

Decker, a value-added biscuit that enrobes

its Treat jam biscuit with a layer of chocolate,

last year. Choco Decker now has a twin

presence in the biscuit rack and the

confectionery counter. This helps Britannia

expand its consumer group.

Britannia also has baked wheat snack in its

portfolio which is focused on the youth. With

packaging and placement similar to chips,

Britannia plays into the blur yet it is not keen

on limiting itself by branding as chips. It

wants to leverage its core competency of

baking which is considered healthier

Kelloggs

Kellogg India too has leaped into the snack

box from the breakfast bowl. From a category

targeted largely at mothers earlier, Kellogg

shrunk its pack sizes to tap into the evening

snack opportunity for children by placing 10

packs alongside chips in supermarkets

Knorr

Consumer goods giant HUL too launched Knorr

Soupy Noodles lin February 2010. Knorr's

advertising has positioned the product as a

hybrid 7 pm snack combining both, the value of

soup with a product loved by children. Its strategy

is to leverage market leadership in soup to break

into the Nestle Maggi-dominated instant noodles

category. HUL was intelligent enough to target

both the soup and noodle segment by just a

minor innovation. In soupy noodles, Knorr soupy

noodles is a combination of noodles with the

soup masala. Thus without actually producing

any new ingredient it has managed to target both

the soup and noodles segment.

Appy Fizz

This drink by ParleAgro consists carbonated

apple juice. This was a sequel product of Appy

which was clean apple juice. The drink was the

subject of a successful campaign of advertising

at cricket matches in 2007-08. With its

champagne shaped bott le and smar t

advertising, Parle has succeeded in creating a

Fizz in the segment, which is basically the Indian

Youth. Appy Fizz plays both in the Carbonated

drink as well as the fruit based nectar drink

segment. Actually it also competes with the

mocktails due to its champagne like packaging.

Chyawanprash cookies

Take the case of Unibic, which wants you has

combined cookie wi th chyavanprash

A new offering from the Indian arm of Australian

cookie maker Unibic will club the health benefits

of chyawanprash within the reassuring mould of

cookie dough. The brand wants to straddle both

categories. While Unibic still competes with

other cookie makers, the innovation could put it

under the radar of chyawanprash makers such

as Dabur and Emami.

Mc Donalds

McDonalds' Deluxe Wrap is a

snack as well as a meal.

Snacking has been on the rise

for the past decade or so and

affordability is one of the

driving forces creating hyper

growth in the category. Affordability is not a new

term, but it is a new factor that food retailers and

foodservice operators are grappling with today.

A combination of snack food items are packaged

in a combination and presented as a meal.

United they are a meal and divided they are

snacks.

Going by the current trends target in multiple

segments with the same product is going to be

come a norm but it is a plus point for the

consumers since they would experience the

benefits of 2 products in one.

Knorrs Soupy Noodles

McDonalds Wraps

Britannia plays into the blur yet it is not keen on

limiting itself by branding as chips. It wants to

leverage its core competency of baking which is

considered healthier

TRENDZ

Britannia

The biscuit maker introduced Treat Choco

Decker, a value-added biscuit that enrobes

its Treat jam biscuit with a layer of chocolate,

last year. Choco Decker now has a twin

presence in the biscuit rack and the

confectionery counter. This helps Britannia

expand its consumer group.

Britannia also has baked wheat snack in its

portfolio which is focused on the youth. With

packaging and placement similar to chips,

Britannia plays into the blur yet it is not keen

on limiting itself by branding as chips. It

wants to leverage its core competency of

baking which is considered healthier

Kelloggs

Kellogg India too has leaped into the snack

box from the breakfast bowl. From a category

targeted largely at mothers earlier, Kellogg

shrunk its pack sizes to tap into the evening

snack opportunity for children by placing 10

packs alongside chips in supermarkets

Knorr

Consumer goods giant HUL too launched Knorr

Soupy Noodles lin February 2010. Knorr's

advertising has positioned the product as a

hybrid 7 pm snack combining both, the value of

soup with a product loved by children. Its strategy

is to leverage market leadership in soup to break

into the Nestle Maggi-dominated instant noodles

category. HUL was intelligent enough to target

both the soup and noodle segment by just a

minor innovation. In soupy noodles, Knorr soupy

noodles is a combination of noodles with the

soup masala. Thus without actually producing

any new ingredient it has managed to target both

the soup and noodles segment.

Appy Fizz

This drink by ParleAgro consists carbonated

apple juice. This was a sequel product of Appy

which was clean apple juice. The drink was the

subject of a successful campaign of advertising

at cricket matches in 2007-08. With its

champagne shaped bott le and smar t

advertising, Parle has succeeded in creating a

Fizz in the segment, which is basically the Indian

Youth. Appy Fizz plays both in the Carbonated

drink as well as the fruit based nectar drink

segment. Actually it also competes with the

mocktails due to its champagne like packaging.

Chyawanprash cookies

Take the case of Unibic, which wants you has

combined cookie wi th chyavanprash

A new offering from the Indian arm of Australian

cookie maker Unibic will club the health benefits

of chyawanprash within the reassuring mould of

cookie dough. The brand wants to straddle both

categories. While Unibic still competes with

other cookie makers, the innovation could put it

under the radar of chyawanprash makers such

as Dabur and Emami.

Mc Donalds

McDonalds' Deluxe Wrap is a

snack as well as a meal.

Snacking has been on the rise

for the past decade or so and

affordability is one of the

driving forces creating hyper

growth in the category. Affordability is not a new

term, but it is a new factor that food retailers and

foodservice operators are grappling with today.

A combination of snack food items are packaged

in a combination and presented as a meal.

United they are a meal and divided they are

snacks.

Going by the current trends target in multiple

segments with the same product is going to be

come a norm but it is a plus point for the

consumers since they would experience the

benefits of 2 products in one.

Knorrs Soupy Noodles

McDonalds Wraps

Britannia plays into the blur yet it is not keen on

limiting itself by branding as chips. It wants to

leverage its core competency of baking which is

considered healthier

TRENDZ

The High net-worth customer

She vacations twice a year in Europe, doesn't leave

home without her precious LV, swears by her pair of

Jimmy Choos, has countless designer outfits ranging

from the likes of Gucci to D&G and rides in a fancy

chauffeur driven BMW. Who is she? She is the young

hip Indian woman born to a life of luxury. She is a

member of the crme de la crme sitting pretty at the

top end of the wealth spectrum where being filthy rich

is beautiful. For her, luxury is an essential form of self

indulgence. It is this customer that luxury brands like

Cartier, Rolex, LV, DKNY, Chanel and many more are

trying to woo.

Luxury goods

Luxury goods are perceived as rewards for

achievements and as a means to showcase these

achievements to others. They are not governed by the

utility they serve. It is the aura of exclusivity that they

possess which is reflected in the persona of the

owner and makes them extremely desirable.

According to a study by American Express, 'Inside the

Affluent Space', the mindset of the Indian luxury

consumer is a desire to prove that I've Made It.

These set of elite individuals are price insensitive and

look for exclusivity above all else. They regard luxury

products as social status symbols and there is

a lot of pride associated with the ownership of

the high end brands. Their purpose for luxury

goods is to lavish themselves in self-

indulgence.

India's lust for luxe

Being one of the fastest growing economies in

the Asia-Pacific region, India is expected to be

the next hub of luxury goods consumption.

The third annual Asia-Pacific Wealth Report

publ ished by Merr i l l Lynch Wealth

Management and Capgemini had estimated

that there were 123,000 millionaires (in dollars)

in India at the end of 2007, up 22.7 per cent

from a year ago.

There was a time when one had to travel abroad

to buy a Gucci or an Armani. However, the

scenario has changed over the last decade with

a plethora of luxury brands flocking India to be a

part of 'The Great Indian Growth Story'.

This occurrence can be explained as a

combination of push and pull. On the one hand,

luxury retailers are spreading their wings to

Zehra Ladiwala

Is currently pursuing her MBA at

NMiMS, Mumbai.A Computer

Science Engineer by profession and

a shopoholic by choice. The world of

luxury brands has always fascinated

her and this is what made writing this

article a very enjoyable experience

for her.

Shreyans

Born, brought up and touched 6 ft, all

in Mumbai! Electronics Engineer

from Mumbai University. Worked at

Infosys. Never managed anything

higher than a C in a Marketing,

thats what inspired him to write an

article for BUZZ! ;)

Authors

The third annual Asia-Pacific Wealth Report published

by Merrill Lynch Wealth Management and Capgemini

had estimated that there were 123,000 millionaires (in

dollars) in India at the end of 2007, up 22.7 per cent from

a year ago.

Marketing to the

High Net Worth

Customer: Trends

and Future

12| Buzz - The Markazine | Jun 2011 13| Buzz - The Markazine | Jun 2011

TRENDZ

The High net-worth customer

She vacations twice a year in Europe, doesn't leave

home without her precious LV, swears by her pair of

Jimmy Choos, has countless designer outfits ranging

from the likes of Gucci to D&G and rides in a fancy

chauffeur driven BMW. Who is she? She is the young

hip Indian woman born to a life of luxury. She is a

member of the crme de la crme sitting pretty at the

top end of the wealth spectrum where being filthy rich

is beautiful. For her, luxury is an essential form of self

indulgence. It is this customer that luxury brands like

Cartier, Rolex, LV, DKNY, Chanel and many more are

trying to woo.

Luxury goods

Luxury goods are perceived as rewards for

achievements and as a means to showcase these

achievements to others. They are not governed by the

utility they serve. It is the aura of exclusivity that they

possess which is reflected in the persona of the

owner and makes them extremely desirable.

According to a study by American Express, 'Inside the

Affluent Space', the mindset of the Indian luxury

consumer is a desire to prove that I've Made It.

These set of elite individuals are price insensitive and

look for exclusivity above all else. They regard luxury

products as social status symbols and there is

a lot of pride associated with the ownership of

the high end brands. Their purpose for luxury

goods is to lavish themselves in self-

indulgence.

India's lust for luxe

Being one of the fastest growing economies in

the Asia-Pacific region, India is expected to be

the next hub of luxury goods consumption.

The third annual Asia-Pacific Wealth Report

publ ished by Merr i l l Lynch Wealth

Management and Capgemini had estimated

that there were 123,000 millionaires (in dollars)

in India at the end of 2007, up 22.7 per cent

from a year ago.

There was a time when one had to travel abroad

to buy a Gucci or an Armani. However, the

scenario has changed over the last decade with

a plethora of luxury brands flocking India to be a

part of 'The Great Indian Growth Story'.

This occurrence can be explained as a

combination of push and pull. On the one hand,

luxury retailers are spreading their wings to

Zehra Ladiwala

Is currently pursuing her MBA at

NMiMS, Mumbai.A Computer

Science Engineer by profession and

a shopoholic by choice. The world of

luxury brands has always fascinated

her and this is what made writing this

article a very enjoyable experience

for her.

Shreyans

Born, brought up and touched 6 ft, all

in Mumbai! Electronics Engineer

from Mumbai University. Worked at

Infosys. Never managed anything

higher than a C in a Marketing,

thats what inspired him to write an

article for BUZZ! ;)

Authors

The third annual Asia-Pacific Wealth Report published

by Merrill Lynch Wealth Management and Capgemini

had estimated that there were 123,000 millionaires (in

dollars) in India at the end of 2007, up 22.7 per cent from

a year ago.

Marketing to the

High Net Worth

Customer: Trends

and Future

TRENDZ

cent. The market is likely to touch $14.7 bn by

2015.

Trends

Louis Vuitton was the first luxury brand to have

entered the Indian Market in Delhi in 2003. Since

then there has been no looking back with brands

like Boss, Bvlgari, Salvatore Ferragamo, Cavali,

Bogetta Venetta making their presence felt in

India. Luxury brands in India admit that they tend

to bring in the more expensive items in their

inventory knowing the high net worth Indians'

penchant for exclusivity.

A major drawback in India is the absence of high

streets which elsewhere provide symbiotic

clusters of posh retailers like Oxford Street in

London, Fifth Avenue in New York and Avenue

Montaigne in Paris. Thus the Luxury Brand's

initial foray into the Indian market was limited to

five star hotels' shopping arcades due to lack of

decent luxury retail infrastructure in the country.

Today, the trend of luxury retailing has now

shifted towards Luxury Malls like Emporio and

the year old Palladium which have become the

most preferred retail destinations for

international players.

A luxury retail outlet in a five star hotel is a part of

the overall hotel experience, whereas a luxury

mall as an experience is specific to shopping.

Physically, in the look and feel there is hardly

much difference in the stores, however the

overall ambience in a luxury mall is more

shopping focused. These destinations attract the

right kind of potential consumers which luxury

brands need for the growth of their business.

Emporio houses 74 International luxury brands

while Palladium has 65 high-end brands.

However, there is still some ground to be covered

in retailing from luxury malls. In a bid to offset

the exorbitant rates that mall developers charge

for renting the retail space in a luxury mall they

need to attract more consumers who visit the

store with the intention of buying rather than

those who just visit to get a feel of the brand.

Challenges

With most western markets nearing saturation,

the world is looking to the East and India offers

enormous potential for the luxury market along

with countries like China.

This opportunity comes with a pinch of salt as

does everything in our country. Some of the

major challenges faced by luxury brands include

the scattered nature of target population (high

cost of reach), lack of credible real estate

options, and underdeveloped back end

infrastructure like warehouses, FDI regulations

and high import duties. The biggest challenge

however, is to find a proper foothold in the

Indian retail space, already saturated with

modestly-priced, indigenous products, which

India because their home markets are no

longer growing as fast; push has come to

shove. On the other hand, there is every

reason to believe that India will take off. The

rise in disposable income, coupled with

growing brand consciousness of the urban

elite and increased global exposure has led

to a spurt in the demand for luxury goods.

The luxury goods market in India is currently

sized at $4.76 bn and is growing at a

compounded annual growth rate of 25 per

streets which elsewhere provide symbiotic clusters of

posh retailers like Oxford Street in London, Fifth Avenue

in New York and Avenue Montaigne in Paris.

Luxury Mall, New Delhi

Buggati Veron - Worlds fastest car

A Jimmy Choo Boutigue

TRENDZ

cent. The market is likely to touch $14.7 bn by

2015.

Trends

Louis Vuitton was the first luxury brand to have

entered the Indian Market in Delhi in 2003. Since

then there has been no looking back with brands

like Boss, Bvlgari, Salvatore Ferragamo, Cavali,

Bogetta Venetta making their presence felt in

India. Luxury brands in India admit that they tend

to bring in the more expensive items in their

inventory knowing the high net worth Indians'

penchant for exclusivity.

streets which elsewhere provide symbiotic

clusters of posh retailers like Oxford Street in

London, Fifth Avenue in New York and Avenue

Montaigne in Paris. Thus the Luxury Brand's

initial foray into the Indian market was limited to

five star hotels' shopping arcades due to lack of

decent luxury retail infrastructure in the country.

Today, the trend of luxury retailing has now

shifted towards Luxury Malls like Emporio and

the year old Palladium which have become the

most preferred retail destinations for

international players.

A luxury retail outlet in a five star hotel is a part of

the overall hotel experience, whereas a luxury

mall as an experience is specific to shopping.

Physically, in the look and feel there is hardly

much difference in the stores, however the

overall ambience in a luxury mall is more

shopping focused. These destinations attract the

right kind of potential consumers which luxury

brands need for the growth of their business.

Emporio houses 74 International luxury brands

while Palladium has 65 high-end brands.

However, there is still some ground to be covered

in retailing from luxury malls. In a bid to offset

the exorbitant rates that mall developers charge

for renting the retail space in a luxury mall they

need to attract more consumers who visit the

store with the intention of buying rather than

those who just visit to get a feel of the brand.

Challenges

With most western markets nearing saturation,

the world is looking to the East and India offers

enormous potential for the luxury market along

with countries like China.

This opportunity comes with a pinch of salt as

does everything in our country. Some of the

major challenges faced by luxury brands include

the scattered nature of target population (high

cost of reach), lack of credible real estate

options, and underdeveloped back end

infrastructure like warehouses, FDI regulations

and high import duties. The biggest challenge

however, is to find a proper foothold in the

Indian retail space, already saturated with

modestly-priced, indigenous products, which

India because their home markets are no

longer growing as fast; push has come to

shove. On the other hand, there is every

reason to believe that India will take off. The

rise in disposable income, coupled with

growing brand consciousness of the urban

elite and increased global exposure has led

to a spurt in the demand for luxury goods.

The luxury goods market in India is currently

sized at $4.76 bn and is growing at a

compounded annual growth rate of 25 per

streets which elsewhere provide symbiotic clusters of

posh retailers like Oxford Street in London, Fifth Avenue

in New York and Avenue Montaigne in Paris.

Luxury Mall, New Delhi

Buggati Veron - Worlds fastest car

A Jimmy Choo Boutigue

TRENDZ

Marketing to the Global Desi

In order to succeed in India, luxury brands need

to localise their marketing strategies. This goes

further than just putting an Indian print on a bag

or collaborating with a local celebrity. India

houses a variety of cultures, languages, festivals

and tastes. So, it is imperative to understand the

difference between the flamboyant nature of a

Punjabi customer and the more reserved nature

of a Gujarati, and speaking to each of them in the

specific cultural register that they respond to.

Those brands who are willing to better

understand and connect with the local Indian

consumer will be the ones who are most

successful.

For example, luxury brand Montblanc which

successfully operates nineteen retail points

across first, second and third tier cities in India

has regionalised all their marketing material.

Brands like Louis Vuitton and Rolls Royce have

also localised their approaches, identifying

important events and celebrations amongst

potential clients and arriving with personalised

gifts or a surprise car service for the occasion.

Louis Vuitton had readied a worldwide Diwali-

themed splash for their stores last year; Swiss

watchmaker Audemars Piguet unveiled a Rs. 2.1-

crore ($472,000) gift idea during Diwali. Very

recently, the world's most expensive car, the

Bugatti Veyron 16.4 Grand Sport, with a price tag

of over Rs16 crore has debuted in India in the

Diwali run-up.

What these players also need to understand is

that a sale cannot be the final point of their

lexicon. It should be the beginning of their

relationship with the consumer just as the luxury

brands' affair with India has also just begun.

It is an established fact that every Indian now

wants to own products that inspire awe and envy.

But will India's luxury malls be able to match up to

the luxury malls of the world making it a coveted

luxury shopping destination? Only time will tell.

can prove to be a Herculean task for these

premium product companies.

Also, the customer segment being targeted

by international luxury brands consists of

frequent international travellers who

overwhelmingly prefer the experience of

purchasing Western luxury goods abroad,

where brands offer them wider choice, better

service and more competitive pricing than

what's currently available inside India. So

why should they buy a Cartier here, when

they can get it for much less on their travels?

In order to succeed in India, luxury brands need to

localise their marketing strategies. This goes further

than just putting an Indian print on a bag or

collaborating with a local celebrity.

Palladium Mall, Mumbai

TRENDZ

Marketing to the Global Desi

In order to succeed in India, luxury brands need

to localise their marketing strategies. This goes

further than just putting an Indian print on a bag

or collaborating with a local celebrity. India

houses a variety of cultures, languages, festivals

and tastes. So, it is imperative to understand the

difference between the flamboyant nature of a

Punjabi customer and the more reserved nature

of a Gujarati, and speaking to each of them in the

specific cultural register that they respond to.

Those brands who are willing to better

understand and connect with the local Indian

consumer will be the ones who are most

successful.

For example, luxury brand Montblanc which

successfully operates nineteen retail points

across first, second and third tier cities in India

has regionalised all their marketing material.

Brands like Louis Vuitton and Rolls Royce have

also localised their approaches, identifying

important events and celebrations amongst

potential clients and arriving with personalised

gifts or a surprise car service for the occasion.

Louis Vuitton had readied a worldwide Diwali-

themed splash for their stores last year; Swiss

watchmaker Audemars Piguet unveiled a Rs. 2.1-

crore ($472,000) gift idea during Diwali. Very

recently, the world's most expensive car, the

Bugatti Veyron 16.4 Grand Sport, with a price tag

of over Rs16 crore has debuted in India in the

Diwali run-up.

What these players also need to understand is

that a sale cannot be the final point of their

lexicon. It should be the beginning of their

relationship with the consumer just as the luxury

brands' affair with India has also just begun.

It is an established fact that every Indian now

wants to own products that inspire awe and envy.

But will India's luxury malls be able to match up to

the luxury malls of the world making it a coveted

luxury shopping destination? Only time will tell.

can prove to be a Herculean task for these

premium product companies.

Also, the customer segment being targeted

by international luxury brands consists of

frequent international travellers who

overwhelmingly prefer the experience of

purchasing Western luxury goods abroad,

where brands offer them wider choice, better

service and more competitive pricing than

what's currently available inside India. So

why should they buy a Cartier here, when

they can get it for much less on their travels?

In order to succeed in India, luxury brands need to

localise their marketing strategies. This goes further

than just putting an Indian print on a bag or

collaborating with a local celebrity.

Palladium Mall, Mumbai

TRENDZ

Inception - the idea or phenomenon of getting into an

individual's brain via his dreams, and compelling him

to do your bidding. Infiltrate his dreams as he sleeps

under the starry skies and by the time he realizes he's

losing something, it's done, and he wakes up to

nothingness! Know his deepest secrets or mould his

thoughts so as to get around the hurdles of awake-

hood. But what if this very esoteric action was used

by say, the sales manager of a soft drink MNC, or

maybe a high-end shoe maker? What if they could

penetrate our defenses, knowing the way someone's

line of thought progresses in, and then manipulate all

of that to make him buy their product. Illegal? Well,

that's an issue which is too far off to discuss in the

absurdity of the moment. But, thinking like a

marketer, it'sWOW!!

Let's bring the concept two notches down, and what

we have is Neuro-marketing.

Wikipedia defines neuro-marketing as 'a new field of

marketing that studies consumers' sensorimotor,

cognitive, and affective response to marketing

stimuli. Researchers use technologies such as

functional magnetic resonance imaging (fMRI) to

measure changes in activity in parts of the brain,

electroencephalography (EEG) to measure activity in

specific regional spectra of the brain

response, and/or sensors to measure

changes in one's physiological state (heart

rate, respiratory rate, galvanic skin response)

to learn why consumers make the decisions

they do, and what part of the brain is telling

them to do it.'

The natural question though is-why neuro-

marketing? Because people rarely say what

they think when they are asked about what

they 'think' in response to a certain question.

I can make you read this!

You are not reading this sentence because of

the title or because you are interested in what is

written on the next page, but maybe because

there's something about this picture.

Why?

Because the picture is eliciting some kind of

emotional response in you, your eyes are being

drawn to it, and you choose to read this story to

find out what the heck it's all about.

And this is what this article is all about-Neuro-

marketing!

Many companies have already recognized the

potential neuro-marketing offers and are using it

to gain a competitive edge. A fine example of this

is the American restaurant chain Five Guys.

Let's discover what makes them tick and how!

Keep things simple-We help you

choose

Five Guys has a minimalist menu. It is totally

focused on one entree, the hamburger, and one

side dish, french fries. One alternate entree, a

Kushal Mehta

Is currently pursuing his MBA at

NMIMS, Mumbai, with a Majors in

Marketing. He has completed his

B . T e c h i n E l e c t r o n i c s &

Communication Engineering from

STCET, Kolkata. He is a music buff

and ardent football fan, and takes

keen interest in reading too.

Rachita Behl

Is currently pursuing her MBA in HR

from NMIMS, Mumbai. She did her

Engineering from VNR VJIET,

Hyderabad. Her passion rests in the

world of literature and she is an avid

reader.

Nandini Kapur

Is currently pursuing MBA in

Marketing from NMiMS,Mumbai .

She has done her B.Tech. in

Electronics & Communications from

Jaypee University of Information

Technology, Solan, She enjoys

making candles and is fascinated by

the traditional Japanese art of paper

folding - Origami..

From NJMs Cradle

What if they could penetrate our defenses,

knowing the way someone's line of thought

progresses in, and then manipulate all of that to

make him buy their product. Illegal?

ITS ALL IN THE

MIND

Neuro-marketing

COVER STORY

Inception - the idea or phenomenon of getting into an

individual's brain via his dreams, and compelling him

to do your bidding. Infiltrate his dreams as he sleeps

under the starry skies and by the time he realizes he's

losing something, it's done, and he wakes up to

nothingness! Know his deepest secrets or mould his

thoughts so as to get around the hurdles of awake-

hood. But what if this very esoteric action was used

by say, the sales manager of a soft drink MNC, or

maybe a high-end shoe maker? What if they could

penetrate our defenses, knowing the way someone's

line of thought progresses in, and then manipulate all

of that to make him buy their product. Illegal? Well,

that's an issue which is too far off to discuss in the

absurdity of the moment. But, thinking like a

marketer, it'sWOW!!

Let's bring the concept two notches down, and what

we have is Neuro-marketing.

Wikipedia defines neuro-marketing as 'a new field of

marketing that studies consumers' sensorimotor,

cognitive, and affective response to marketing

stimuli. Researchers use technologies such as

functional magnetic resonance imaging (fMRI) to

measure changes in activity in parts of the brain,

electroencephalography (EEG) to measure activity in

specific regional spectra of the brain

response, and/or sensors to measure

changes in one's physiological state (heart

rate, respiratory rate, galvanic skin response)

to learn why consumers make the decisions

they do, and what part of the brain is telling

them to do it.'

The natural question though is-why neuro-

marketing? Because people rarely say what

they think when they are asked about what

they 'think' in response to a certain question.

I can make you read this!

You are not reading this sentence because of

the title or because you are interested in what is

written on the next page, but maybe because

there's something about this picture.

Why?

Because the picture is eliciting some kind of

emotional response in you, your eyes are being

drawn to it, and you choose to read this story to

find out what the heck it's all about.

And this is what this article is all about-Neuro-

marketing!

Many companies have already recognized the

potential neuro-marketing offers and are using it

to gain a competitive edge. A fine example of this

is the American restaurant chain Five Guys.

Let's discover what makes them tick and how!

Keep things simple-We help you

choose

Five Guys has a minimalist menu. It is totally

focused on one entree, the hamburger, and one

side dish, french fries. One alternate entree, a

Kushal Mehta

Is currently pursuing his MBA at

NMIMS, Mumbai, with a Majors in

Marketing. He has completed his

B . T e c h i n E l e c t r o n i c s &

Communication Engineering from

STCET, Kolkata. He is a music buff

and ardent football fan, and takes

keen interest in reading too.

Rachita Behl

Is currently pursuing her MBA in HR

from NMIMS, Mumbai. She did her

Engineering from VNR VJIET,

Hyderabad. Her passion rests in the

world of literature and she is an avid

reader.

Nandini Kapur

Is currently pursuing MBA in

Marketing from NMiMS,Mumbai .

She has done her B.Tech. in

Electronics & Communications from

Jaypee University of Information

Technology, Solan, She enjoys

making candles and is fascinated by

the traditional Japanese art of paper

folding - Origami..

From NJMs Cradle

What if they could penetrate our defenses,

knowing the way someone's line of thought

progresses in, and then manipulate all of that to

make him buy their product. Illegal?

ITS ALL IN THE

MIND

Neuro-marketing

COVER STORY

hot dog, is also available. The principle of

neuro-marketing at work here is that

customers presented with fewer choices in

a retail environment buy greater quantities of

product.

But how is the menu so simple? Lack of

variety? Nay. They give away all their toppings

for FREE! This reduces the paying pain of

customers and strengthens their value

proposition.

Because others say so

Walls screaming out loud The burgers at Five

Guys are awesome! A third of their paper

takeout menus covered up with reviews. The

principle at work- Social Proof. A theory that

suggests we base our response to a situation

based on how others react to it. By the time you

start munching on your food, your expectations

would already have been set. Even if you had

doubts when you walked in through the door, all

those burger lovers in other places cannot be

wrong, right?

Appeal to the senses

These guys go beyond the taste buds. Rightly so.

Half of the beauty of food is in its smell. Look even

beyond that. Five Guys appeals to the visual

senses too! To show that they use only fresh

potatoes, they line up bags of the spuds where

the customers queue up to order. As they say a

picture is worth a thousand words! It drives the

point home far more effectively by going straight

to our subconscious.

Whether Five Guys consulted any neuroscientist,

we can't say. But one thing's for sure. What we

see here is a perfect union of marketing and

neuroscience aka neuro-marketing! And clearly,

it works! So it would not be wrong to assume that

as time passes, and economic and financial

pressure increases, more and more companies

will turn to neuro-marketing. Behavioral science

will soon be a major part of market research.

After all how many times do you get a chance like

this one to convert a consumer's mmm-good

into mmm-better?

Lessons for marketers? To strengthen your

brand, appeal to the customers' reptilian or the

old brain, which guides all buying decisions. It all

comes down to who triggers the first reptilian

action. So what does this brain respond to?

Emotions that excite all the senses, and for a

customer, the 4Ps are his 'senses'. Visual

orientation, conveying tangible benefits,

memorable beginnings and endings that

influence the entire experience, minimizing the

gain vs pain tradeoff are some of the ways to

achieve that.

Like everything else, it is the beginning and the

ending that influence the entire experience.

However, being at its nascent stage, Neuro-

marketing brings in quite a lot of apprehension.

After all, Inception is the idea or phenomenon of

getting into an individual's brain via his dreams,

and compelling him to do your bidding. So how

ethical is this entire process of reading the

consumer's mind? Knowing what drives a

consumer and doing just that to make him

choose your product over the others? We might

condone such an act if it is harmful. But who

shalt be thy judge? Who shalt stop and tell thy

that thou dost wrong?

We all know that the warning labels on cigarettes

make smokers want to smoke more. So where is

the limit? Curiously, the seed is already sown.

Like everything else, it is the beginning and

the ending that influence the entire

experience.

COVER STORY

Jerry Murrell, Five Guys Burgers

and Fries

hot dog, is also available. The principle of

neuro-marketing at work here is that

customers presented with fewer choices in

a retail environment buy greater quantities of

product.

But how is the menu so simple? Lack of

variety? Nay. They give away all their toppings

for FREE! This reduces the paying pain of

customers and strengthens their value

proposition.

Because others say so

Walls screaming out loud The burgers at Five

Guys are awesome! A third of their paper

takeout menus covered up with reviews. The

principle at work- Social Proof. A theory that

suggests we base our response to a situation

based on how others react to it. By the time you

start munching on your food, your expectations

would already have been set. Even if you had

doubts when you walked in through the door, all

those burger lovers in other places cannot be

wrong, right?

Appeal to the senses

These guys go beyond the taste buds. Rightly so.

Half of the beauty of food is in its smell. Look even

beyond that. Five Guys appeals to the visual

senses too! To show that they use only fresh

potatoes, they line up bags of the spuds where

the customers queue up to order. As they say a

picture is worth a thousand words! It drives the

point home far more effectively by going straight

to our subconscious.

Whether Five Guys consulted any neuroscientist,

we can't say. But one thing's for sure. What we

see here is a perfect union of marketing and

neuroscience aka neuro-marketing! And clearly,

it works! So it would not be wrong to assume that

as time passes, and economic and financial

pressure increases, more and more companies

will turn to neuro-marketing. Behavioral science

will soon be a major part of market research.

After all how many times do you get a chance like

this one to convert a consumer's mmm-good

into mmm-better?

Lessons for marketers? To strengthen your

brand, appeal to the customers' reptilian or the

old brain, which guides all buying decisions. It all

comes down to who triggers the first reptilian

action. So what does this brain respond to?

Emotions that excite all the senses, and for a

customer, the 4Ps are his 'senses'. Visual

orientation, conveying tangible benefits,

memorable beginnings and endings that

influence the entire experience, minimizing the

gain vs pain tradeoff are some of the ways to

achieve that.

Like everything else, it is the beginning and the

ending that influence the entire experience.

However, being at its nascent stage, Neuro-

marketing brings in quite a lot of apprehension.

After all, Inception is the idea or phenomenon of

getting into an individual's brain via his dreams,

and compelling him to do your bidding. So how

ethical is this entire process of reading the

consumer's mind? Knowing what drives a

consumer and doing just that to make him

choose your product over the others? We might

condone such an act if it is harmful. But who

shalt be thy judge? Who shalt stop and tell thy

that thou dost wrong?

We all know that the warning labels on cigarettes

make smokers want to smoke more. So where is

the limit? Curiously, the seed is already sown.

Like everything else, it is the beginning and

the ending that influence the entire

experience.

COVER STORY

Jerry Murrell, Five Guys Burgers

and Fries

Organised coffee retailing is a niche but growing

segment in India which is now worth close to USD

441 million with around 1500 cafes is 150 cities. The

coffee retail market is expected to grow at an annual

rate of over 40%.

At present, Indian sips coffee from players like Caf

Coffee Day, Barista, Costa Coffee, Gloria Jeans,

Qwiky's, Caf Nescafe and Coffee Bean. Bang

alore based chain Caf Coffee

Day is currently the leader with

1,090 cafs and kiosks, and

15,000 vending machines.

Barista, owned by Italy-based

Lavazza, is second, followed

by UK-based chain Costa Coffee.

Starbucks, an international coffee caf

chain had recently signed a non-binding

Memorandum of Understanding (MoU) with Tata

Coffee Ltd for sourcing coffee and for retail business

in India. Starbucks will set up its storesin luxurious 5

star hotels of Tata.

In fact few more international coffee chains are

preparing to enter India. The UK's Coffee Republic,

Malta's Cafe Jubilee and Australia's Coffee Club

Group are looking for franchise partners in India.

Dunkin donuts had already announced to open 500

stores in the next 15 years. Recent survey says that

doing business in India has become more congenial

now which is one of the major reasons that

these companies can't ignore India now

(Exhibit 3).

By recognising the fast emerging coffee and

hangout culture in India Starbuckshad tried

to enter Indian shores in the past by

collaboration with the

Group, Anil Ambani Group and Jubilant Foods

Ltd. But none of these attempts fructified.So

Entrance of Starbucks in collaboration with

Tata is not shocking news for anyone.

According to industry estimates, there is

scope for another 5,400 outlets strategically

located close to offices, colleges and

shopping malls. Every player is already

planning to expand over the next two-three

Kishore Biyani's Future

years and penetrate tier II and tier III cities.

Does the entrance of Starbucks means that the

existing players should wake up and smell the

coffee?Competition is already intense among

existing chains and they are trying hard to woo

consumers but with the arrival of Starbucks the

intensity of this competition will increase

further.

Barista and CCD have a first mover's advantage

as they have already customized their menu for

the Indian palette.The existing coffee chains

have targeted the premium segment youth, as

they realized that it wasn't only coffee that their

target segment was looking for, but also for a

place to hang around comfortably, where they

could be themselves and do whatever they

wanted, such as play games, read books, listen

to music, enjoy arts, surf the Net or simply

chilling out. Starbucks with its vast experience of

h a n d l i n g c o n s u m e r s f ro m d i f fe r e n t

geographical regions would certainly have a

competitive edge here. It has indicated that it is

going to position itself as an elite brand and

Sarika Sinha

a student of Goa institute of

Management, Goa

Ms. Sinha has done B.Tech in textile

technology from UPTTI, Kanpur.

Before joining GIM, she has worked

in Supply Chain Management at

Raymond ltd.She has worked as an

editor of college annual journal

Fibre to Finish.

Chandramouli Muthiah

is currently pursuing MBA from Goa

institute of Management, Goa

Mr Muthiah has done his Bachelors

in Arts and has worked in Marketing

and Sales. He has an interest in

cricket and has played for Karnataka

State cricket team.

Authors

India is one of the most dynamic

markets in the world with a diverse

culture and tremendous potentialHoward Schultz, Chairman, Starbucks

Namaste

Starbucks!!!

premire

Calendar year Quantity in (MT)

2004 75,000

2005 80,200

2006 85,000

2007 90,000

2008 94,400

Exibit 1 :

Coffee Consumption in India

Organised coffee retailing is a niche but growing

segment in India which is now worth close to USD

441 million with around 1500 cafes is 150 cities. The

coffee retail market is expected to grow at an annual

rate of over 40%.

At present, Indian sips coffee from players like Caf

Coffee Day, Barista, Costa Coffee, Gloria Jeans,

Qwiky's, Caf Nescafe and Coffee Bean. Bang

alore based chain Caf Coffee

Day is currently the leader with

1,090 cafs and kiosks, and

15,000 vending machines.

Barista, owned by Italy-based

Lavazza, is second, followed

by UK-based chain Costa Coffee.

Starbucks, an international coffee caf

chain had recently signed a non-binding

Memorandum of Understanding (MoU) with Tata

Coffee Ltd for sourcing coffee and for retail business

in India. Starbucks will set up its storesin luxurious 5

star hotels of Tata.

In fact few more international coffee chains are

preparing to enter India. The UK's Coffee Republic,

Malta's Cafe Jubilee and Australia's Coffee Club

Group are looking for franchise partners in India.

Dunkin donuts had already announced to open 500

stores in the next 15 years. Recent survey says that

doing business in India has become more congenial

now which is one of the major reasons that

these companies can't ignore India now

(Exhibit 3).

By recognising the fast emerging coffee and

hangout culture in India Starbuckshad tried

to enter Indian shores in the past by

collaboration with the

Group, Anil Ambani Group and Jubilant Foods

Ltd. But none of these attempts fructified.So

Entrance of Starbucks in collaboration with

Tata is not shocking news for anyone.

According to industry estimates, there is

scope for another 5,400 outlets strategically

located close to offices, colleges and

shopping malls. Every player is already

planning to expand over the next two-three

Kishore Biyani's Future

years and penetrate tier II and tier III cities.

Does the entrance of Starbucks means that the

existing players should wake up and smell the

coffee?Competition is already intense among

existing chains and they are trying hard to woo

consumers but with the arrival of Starbucks the

intensity of this competition will increase

further.

Barista and CCD have a first mover's advantage

as they have already customized their menu for

the Indian palette.The existing coffee chains

have targeted the premium segment youth, as

they realized that it wasn't only coffee that their

target segment was looking for, but also for a

place to hang around comfortably, where they

could be themselves and do whatever they

wanted, such as play games, read books, listen

to music, enjoy arts, surf the Net or simply

chilling out. Starbucks with its vast experience of

h a n d l i n g c o n s u m e r s f ro m d i f fe r e n t

geographical regions would certainly have a

competitive edge here. It has indicated that it is

going to position itself as an elite brand and

Sarika Sinha

a student of Goa institute of

Management, Goa

Ms. Sinha has done B.Tech in textile

technology from UPTTI, Kanpur.

Before joining GIM, she has worked

in Supply Chain Management at

Raymond ltd.She has worked as an

editor of college annual journal

Fibre to Finish.

Chandramouli Muthiah

is currently pursuing MBA from Goa

institute of Management, Goa

Mr Muthiah has done his Bachelors

in Arts and has worked in Marketing

and Sales. He has an interest in

cricket and has played for Karnataka

State cricket team.

Authors

India is one of the most dynamic

markets in the world with a diverse

culture and tremendous potentialHoward Schultz, Chairman, Starbucks

Namaste

Starbucks!!!

premire

Calendar year Quantity in (MT)

2004 75,000

2005 80,200

2006 85,000

2007 90,000

2008 94,400

Exibit 1 :

Coffee Consumption in India

intense competition it seems it would

become more service-led than price-led

differentiation in the future.

To combat competition, India is one of

the most dynamic markets in the world

with a diverseculture and tremendous

potential. This MoU is the first step in our

entry to India said Howard Schultz,

Chairman,Starbucks.

We welcome the entry of Starbucks into

India. It will certainly add to the excitement of the

culture of cafes here and we are looking forward

to an expanded market going forward, said Venu

Madhav, COO, CCD

CCD is already looking to launch another 200

cafes to add to its presence on highways and

inside malls and corporate offices. Italso plans

to open no. of lounges in major citiesas well as

Coffee Day Squares in major cities. These

lounges will target mainly young professionals

who grew up on CCD. Similarly, as a part of

differentiating its services, Barista is already

offering Italian food at its outlets and also

entered into tie ups with Planet M, Crossword

and Ebony to set up Espresso Corners at these

places. Also to expand its reach, the company

has opened outlets in theatres, offices, airports

and in hotels.

Indeed Starbucks entry will stimulate growth in

the coffee and hangout culture. Everyone will try

to deliver the best to be the consumer's first

choice. The price sensitive nature of the Indian

market will be a challenge for Starbucks.

Retaining performing employees for all chains

will be another problem since the well versed

hands in this sector would love to join

international brands.

Though none of the companies are willing to

admit the tension with the entry of such a large

player, all are keen to know what formats

Starbucks will bring to India and what will be

their strategies. Its success in the long run will

however depend on how well it is able to adapt to

Indian taste buds.Some coffee chains might

decide to sell their stakes to Starbucks which will

further strengthen its positioning in India.

India is a country of equal opportunities and

Indians are known for their warm welcome to

MNC if company is willing to offer the products in

Indian style.It's sure that Starbuckspresence

in the country would improve the caf culture in

the country. Amidst all commotion coffee

connoisseurs will certainly enjoy their fine cup of

coffee.

Indians fast growing appet i te for

extravagance might work well for them.

With the entry of Starbucks the existing

chains has to focus a lot on aggressive

expansion plans, innovative marketing

strategies and variety in products offered.

Coffee and conversations often lead to food

so by offering variety of food (healthy snacks

also)companies can dig deeper in consumer

pocket . A l so by se l l ing d i f fe ren t

merchandises these companies gives

consumer an opportunity to take home a part

of his unforgettable experience. Due to

We welcome the entry of Starbucks into India. It will

certainly add to the excitement of the culture of cafes

here and we are looking forward to an expanded

market going forward

Venu Madhav, COO, CCD.

Exibit 2 : Age wise precentage coffee consumption

Exibit 3 : Pestel Analysis

Political

Stable govt has created better working

environment for industries

High tolerance towards f o r e i g n

countries and encourage foreign investments

proposed changes in FDI structure in

various sectors

Economical

india is no. 1 in consumer confidence

index 2010

Less affected by economic downturn

because of vast domestic consumption

approx 59% population is above low

income line *

Sociocultural

younger polulation with median age

25.9 yrs.

Rising coffee culture and caf

considered as place for socialising and

hangout

Improved living standards of people

Increased brand consciousness will

help Starbucks as coffee is considered as an

elite beverage

Technological

Improved quality of Indian coffee as

80% of coffee is exported

Easy availability of Low cost of labour

!

premire

intense competition it seems it would

become more service-led than price-led

differentiation in the future.

To combat competition, India is one of

the most dynamic markets in the world

with a diverseculture and tremendous

potential. This MoU is the first step in our

entry to India said Howard Schultz,

Chairman,Starbucks.

We welcome the entry of Starbucks into

India. It will certainly add to the excitement of the

culture of cafes here and we are looking forward

to an expanded market going forward, said Venu

Madhav, COO, CCD

CCD is already looking to launch another 200

cafes to add to its presence on highways and

inside malls and corporate offices. Italso plans

to open no. of lounges in major citiesas well as

Coffee Day Squares in major cities. These

lounges will target mainly young professionals

who grew up on CCD. Similarly, as a part of

differentiating its services, Barista is already

offering Italian food at its outlets and also

entered into tie ups with Planet M, Crossword

and Ebony to set up Espresso Corners at these

places. Also to expand its reach, the company

has opened outlets in theatres, offices, airports

and in hotels.

Indeed Starbucks entry will stimulate growth in

the coffee and hangout culture. Everyone will try

to deliver the best to be the consumer's first

choice. The price sensitive nature of the Indian

market will be a challenge for Starbucks.

Retaining performing employees for all chains

will be another problem since the well versed

hands in this sector would love to join

international brands.

Though none of the companies are willing to

admit the tension with the entry of such a large

player, all are keen to know what formats

Starbucks will bring to India and what will be

their strategies. Its success in the long run will

however depend on how well it is able to adapt to

Indian taste buds.Some coffee chains might

decide to sell their stakes to Starbucks which will

further strengthen its positioning in India.

India is a country of equal opportunities and

Indians are known for their warm welcome to

MNC if company is willing to offer the products in

Indian style.It's sure that Starbuckspresence

in the country would improve the caf culture in

the country. Amidst all commotion coffee

connoisseurs will certainly enjoy their fine cup of

coffee.

Indians fast growing appet i te for

extravagance might work well for them.

With the entry of Starbucks the existing

chains has to focus a lot on aggressive

expansion plans, innovative marketing

strategies and variety in products offered.

Coffee and conversations often

Documents

NMIMS NJM Buzz June 2011