Advertising in a Group – I am not doing this alone!!!

(I would like to thank Prof. Anindya Sen, Professor, Economics Group, IIM Calcutta for his invaluable inputs and the enlightening discussions through which he gave me numerous insights without which this article would surely have been incomplete.)

Before we move ahead with this article, I would like to make the disclosure that this article takes more of an Economists view of Advertising and the interactions between firms in an industry. Given this there has to be some leeway while examining the concept presented here. Especially in some cases the cause and effect relationship between entities may not be as clear and an argument can be made on either side.

Recently I came across a very peculiar phenomenon regarding a group of products. These have been in plain view for long now but through this article I try to put in perspective this very interesting product class. Let us build up the attributes of this group rather than straight away jump to taking names as I guess that is where a lot of the fun lies.

This product class is basically highly commoditized which is to say that not many (if any) brands exist here. So when a consumer enters a shop to buy one of these, he is not very choosy or particular as to what he is looking for. He would as well settle for whatever is available (given that it follows a set of minimum quality standards that is). Now let us imagine you are a seller who deals in such a product class. What makes this class peculiar is the fact that if you advertise about your product (especially by trying to entice more people to consume or people to consume more), there is no guarantee that your sales will go up.

In fact what would happen in all probability is that someone somewhere will get all hyped up about the product class and go and buy from a competitor (in most cases one available nearest to him). Game Theory now suggests that you will not advertise as your payoff from it is zero (or close to it maybe).

Not sure this makes sense? Let’s look at examples – egg and milk in India. Though milk defied some of these traits later as the National Dairy Development Board already had a strong precursor in the form of Anand (Amul), the egg production industry presents a very good case in point.

Think about it. You sell eggs. Would it make sense in advertising the eggs you sell? Presenting Harish’s Fresh Eggs – They are fresh and nutritious and guess what their taste is simply divine. Of course I may sell a few. But if you think of it the cost of this will simply not justify the benefits. In the end any of my target group will just turn up and buy whatever eggs they find – after all an egg  is an egg is an egg. How does it matter?

Now what makes more of an economic sense to me is to simply go in for a membership with The National Egg Coordination Committee. This way I get the same advertising (or in case of small egg sellers more advertising) for a much lesser spend. More bang for my buck. Hmm.. this guy is making this up you feel? But wait I have proof. Look at the NECC mission statement and you find these lines –

• Advertise with the objective of educating the customer
• Undertake a powerful egg promotion campaign to counter the myths about the egg and communicate its benefits. This would help increase the level of consumption of eggs
• Market research, identification and its development

Now let’s have a look at one more interesting facet here. The very nature of this industry is that it is highly commoditized. Implication – price differentiation is the only way of competition. If I am a small egg producer and I know the biggies can undercut me in any price war, why would I join such an organization in the first place? After all the biggies are more probable to benefit from any such group! What then ensures the very existence of such industry bodies? There are 2 answers to this –

• As a small producer do I have a choice?
• The benefits from such associations are not limited to only advertising. Think about facets like R&D – any new technology may be available to me only if I am part of this group. Can I still decide to stay out of it?

The benefits surely outweigh the costs of joining. What is going through your mind now? Does any if this make sense? Do you have any examples in mind? Would love to hear from you.

As always ayes and brickbats are welcome. If you would like to share your views in the form of an article in reply to this post, you can email it to marketgaze@gmail.com and I would love to add it to this blog!

Kids – What they “should” do and what they “should not”!!!

Let us start with the title. What comes to your mind when you read something like this? Let us begin with an expectation setting exercise. Recently I came across this advertisement which showed a kid fight an animated character and got to know that the ad was seen in bad light by viewers. So much so that according to some views the campaign was reshaped subsequently. This left me in a quandary as to what is it that people find acceptable and what exactly offends them? As the topic reads the subjects of my study are small kids; between 8 and 14 maybe – prized possessions for many an advertiser mind you!!!

Let’s start with the advertisement in contention here. Have a look –

Apparently this ad was found very violent by viewers. The “deadly” fight between the characters seemingly evoked emotions and the “drowning” was simply too much. I watched the ad from front, behind, top and bottom – still have not managed to find something which would make me freak. If anything I find the animation fascinating and some of the stunts (like drawing bars in the end to keep the animated character at bay) are very imaginative and indeed unseen in the Indian advertising space. Even discounting for my immaturity (you may think probably this guy has an underdeveloped mind  ) – is this ad really bad enough? Well debatable at best.

Made me think of another example!! Remember the Maruti Esteem ad where a small boy (boys seem to be getting ad makers in a lot of trouble you would think  ) dreads how his father would react at his apparently abysmal performance showing on his report card. This boy asks his father if they could go on a long drive knowing well that his father is always in a good mood while driving his Esteem – an excellent setting to break some bad news to your father maybe! I remember that soon after its release, this ad too managed to gain a lot of unwanted negative attention – some people were quick to point out how this ad was having a negative impact on young impressionable minds. Kids, as they would say, had started believing ever since the ad was launched that it’s ok if you do badly at academics as long as your father owns the right car and you know when to grab your opportunity to tell your father you failed.

Again, for many I would like to believe the ad came across as very sweet and even witty – one of those things kids in your house do. Very difficult to actually have found out which impression would prevail as an advertiser prior to the launch of the advertisement!!

Now let us look at another naughty boy (mind you an advertisement from the same brand mentioned in the beginning of this article) –

Considered one of the funniest ads of its time, this has so much recall till date that when I was out recently with a group of friends and the driver was backing the car out of a parking lot and told us to help him out, people spoke out about this advertisement in unison. Now here is another apparently naughty boy, he is doing something which can be considered pretty funny for everyone else but the person driving the car. Wonder why no one has come up yet saying many kids have started destroying cars by playing various pranks on the driver.

A bunch of FMCG companies recently took a joint decision of not targeting children through their ads – well they may still use the kids in their messages. And it’s really touch and go maybe as to what is considered “safe” and what may be seen as leading the kids to acts they should not be indulging in or leaving a bad impression on their mind.

I am not sure if there is an exact list of guidelines we can have here. Things need to be taken on a case-to-case basis. However this is what I can think of as of now –

1) Any form of violence in ads featuring children is a No-No

2) They can’t be seen lying to people considered as influential in their life (in the Indian context) – parents, “good” teachers (I think they can be shown lying to the “wicked” ones  ), “good” friends

3) They can be seen doing naughty things which make you laugh – especially acts which in all probability will not present themselves as opportunities in the normal course of daily life

4) They can be seen as indulging in tit for tat behavior – if you watch the ad, the driver seems to be portrayed as someone with a bad temper/ attitude (you can make that out from his voice modulation and the way he speaks). So when he barks out an order at the boy to see if the car is too close to the tree in a rude manner, the boy may very well decide to teach him a lesson

As you can make out I am not very happy with the over-sensitiveness (that is what I think it is) by a certain section towards anything that goes on TV. Some basic ethics needs to be in place – but believing everything out there needs to be screened so as to shield your son/ daughter from any “perceived” negative influence is…well….asking too much. But that’s just what I feel. What do you think? What thoughts cross your mind? Please do write in your comments.

As always ayes and brickbats are welcome. If you would like to share your views in the form of an article in reply to this post, you can email it to marketgaze@gmail.com and I would love to add it to this blog!