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THE NEW
RULES OF 2012
A G EE N G AEE
NOW ONLY ` 25
VOL. VII ISSUE 422 MAR ‘12
P R O D U C T P R I C E P L A C E P R O M O T I O N
STEPHANIE STROMNATIONAL CORRESPONDENT, THE NEW YORK TIMESTRADEMARKS TAKE ON NEW IMPORTANCE IN INTERNET ERA
HOWARD SCHULTZCHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, STARBUCKSTHE POWER OF AN OPEN MIND
DR. TAZEEB RAJWANIFACULTY OF STRATEGIC MANAGEMENT, CRANFIELD SCHOOL OF MANAGEMENT THE POWER OF SOCIAL TECHNOLOGIES
DAVID WENGERDIRECTOR OF COMMUNICATIONS, MCCOMBS SCHOOL OF BUSINESSTHE TREACHEROUS TRAIL TO CMO SUCCESS
BUSINESS & MARKETING
India’s First & No. 1Business & Marketing
Magazine
redefiningR I C HH
thethe
A PLANMAN MEDIA - IIPM THINK TANK PUBLICATION
ISSN
097
3-43
41
SUB
SCR
IBER
CO
PY N
OT
FOR
RES
ALE
C O N T E N T S
INTNL COLUMNHoward SchultzChairman & CEOStarbucks corporation
RENDEZVOUSLutz KotheHead of Marketing & PR, Volkswagen India
24
14 People Speak
16 Number Speak
18 Inbox: Fortnight 30 Marketers@ war: Cash & carry
36 B-school column: It’s time to unleash the power of social technologies.
48 International Column: Trademarks take on new importance in internet era
50 Marketing Story: Paper industry54 CMO speak: Sajid Shamim, Managing Director, Reebok India56 Marketing Story: Corporate philanthropy58 Ad Rankings
64 First Cut: Fevicol66 Big Idea: Emotions vs rationality68 B school column: Chief Marketing Obsta-
cles: Treacherous Trail to CMO Success82 International Column: Blogger uses rap
to teach pithy business lessons86 Media interview: Avinash Kaul, CEO, ET Now and Zoom95 Brand Quiz
96 Product Launches
98 The Last Word
Cover Design: Pragnesh Patel
COVER STORY
26
Editor in Chief: Arindam ChaudhuriEditor: A. Sandeep
Managing Editor: Sutanu GuruCEO: Deepak Kaistha
Chief Consulting Editor: Rajita ChaudhuriFeatures Editor: Prashanto Banerji
Deputy Editor: Virat Bahri Senior Editor: Steven Philip Warner
Assistant Editors: Manish K. Pandey, Deepak PatraConsulting Editor: Monojit LahiriFounder Editor: Malay Chaudhuri
Managing Editor Projects : Abhimanyu Ghosh
EDITORIAL STAFFEditorial Coordinator: Angshuman Paul
Delhi: Anu Gulmohar, Niharika Patra, Pawan Chabra, Amir Moin, Anirudh Raheja,
Deepanshu TaumarHyderabad: Shyam Sunder Pujala
Kolkata: Tarun BoseBengalooru: Indira Parthasarathy
DESIGN & PRODUCTIONGroup Design Director: Satyajit Datta
Chief of Design: Manish RaghavDeputy Art Director: Pragnesh PatelAsst. Art Director: Siddharth Kapil
Sr. Designer: Priyankar Bhargava, Hitesh Mehta, Alpana Aditya, Prakash Shetty Ulepady
Designer: Dinesh ChandelkarSr. Infographist : Kuldeep Singh
Image Editing: Vinay KambojSenior Illustrator: Shantanu MitraGroup Photo Editor: Ranjan Basu
Sr. Photographer: Sujan SinghChief Photo Coordinator: Varun Pal Singh
Senior Photo Research: Sanjay Kumar, Ashutosh VigProduction Manager: Gurudas Mallik Thakur
Production Supervisor: Digember Singh, Satbir Chauhan,Soumyajeet Gupta, Dipak Basak, N. Ekantha Lingam, Deep Narain
Production Assistant: Omvir Gautam
MARKETING Vice President: Amim Ahmed
Vice President (West): Guljar SinghAssociate Vice President - Ad Sales: Sumit Raina, Rajat Sogani
General Manager (South): Sunil KumarRegional Head: Atul Kapoor
Marketing and Sales: Bhaskar Mojumdar
CIRCULATIONSales Manager: Bhupinder Bisht, Manoj, Rizvi,
Venkat Narasimman, Swaroop Saha, Joydeep, Kunj Bihari,Mukund, Parameshwara, Shihabuddin
SUBSCRIPTIONSGeneral Manager: Pooja Bharadwaj
HEAD INVESTIGATIONSRajat Amarnath
4PS B&M ONLINEChief Web Designer: Neel Verma
Sr. Web Developer: Anil Kumar, Christopher Mani Web Developer: Raj Saikia
For advertisement, feedback and other queries, write to [email protected]
For subscription contact at 011-30268104Email : [email protected],
For editorial queries: [email protected] at: M.P. Printers, B-220, Phase-II, Noida-201 305
Printed & Published by Ashok Boseon behalf of Planman Media Pvt. Ltd.
Editor: A. SandeepPublished from: Planman Media Pvt. Ltd., 48, Community Centre,
Naraina Vihar Industrial Area, Phase-1, New Delhi-110028Visit us at: www.4psbusinessandmarketing.com
Editor,A.Sandeep responsible for the selection of news under PRB act. Entire content copyright(C) 2007 by Planman Media Pvt. Ltd. All rights reserved throughout the world.
Reproduction or translation in any language in whole or in part without permission is pro-hibited. The Publisher assumes no responsibility for the return of the unsolicited material or
for material lost or damaged in transit. All disputes are subject to exclusive jurisdiction of competent courts and forums in Delhi or New Delhi.
INDIA’S FIRST & NO. 1 BUSINESS & MARKETING MAGAZINE
BUSINESS & MARKETING
Volume VII Issue IV 9 March - 22 March ‘12
4Ps FROM NOW WILL BRING OUT 6 QUARTERTLY SUPPLEMENTS. VIZ STRATEGIC INNOVATORS,
TECHNOLOGY NEXT(TN), POWER WOMEN, THORNS
TO COMPETITION, STAR REALITY AND COUNT YOUR
CHICKENS BEFORE THEY HATCH. THUS EVERY ISSUE OF 4PS WILL HAVE AN ADDITIONAL SUPPLEMENT.
All supplements with the magazine have a break issue in the month of March 2012
s
ENGAGE
ENTERTAIN
ENRICH
EMPOWER
EDUCATE
OF ADVERTISING!
THE NEW RULES OF 2012HOW ADVERTISERS ARE REDEFINING
THE F
IVE
70
12 4Ps BUSINESS AND MARKETING 22 MARCH 2012
Never put all your eggs in one basket, they may break and all may be lost. Zynga seems to have woken up to the wisdom of this saying. It has fi nally realized the risk it was running till date by relying completely on Facebook for its bread and butter. So it has launched its own social networking website, which gives users greater fl exibility and added features, besides also cutting through the limitations of sites like Facebook. One such feature in-cludes not just playing but also taking help (to harvest crops or to collect gifts) from
other gamers across the world who may be playing that game on the Zynga website. These friends, also known as zfriends, do not have to be your pals on Facebook. The features are designed to ensure faster progress in the game, a reason that may attract players onto the website. However, not wanting to sour its ties with Facebook or face the wrath of its users who have painstakingly unlocked levels through the Facebook platform, the site makes it mandatory for players to be registered on Facebook to play the game on Zynga.This will
help (at the moment at least) gamers to retain their current game achievements. Zynga’s latest move shall undoubtedly see many users shifting to its new network, which could
pose a direct threat to Facebook. Could this be a Facebook killer in the making?
ZYNGA: BITING THE HAND THAT FEEDS IT?
IT’S RAINING TABLETS
AND INNOVATIONS
It is here... fi nally! BlackBerry released the 2.0 version of its PlayBook’s operating system, thus fi lling the gap for apps that its tablet lacked so far. The absence of basic applications such as Email, Calendar and Contacts had led to the failure of this much hyped tablet last year. However, this time around, not only has BlackBerry included these features but also given them an innovative tweak, probably in an attempt to make up for the lost ground. But is it too little too late? Considering the activity that this category witnesses on a daily basis, the answer is a resounding yes. With both iPad 3 and Asus Transformer Prime (the technology of which Google is rumored to be incorporating in its own tablet) launching the same week, BlackBerry’s software-only upgrade, while defi nitely being a step in the right direction, is not a move that would help it win this intense tablet war. But there’s one card that can tilt things in favour of the PlayBook. That is its unique ability to play 3D movies on the fl y with absolutely no glitches or lag and to project or play the same on a non-3D TV in perfect third dimensions. A feature so powerful that if marketed correctly it can not only challenge competing tablets but also pose a threat to the 3D television market!
Mark Pincus, CEO, Zynga
After changing the brand image and iden-tity of numerous clients, Mudra commu-nications is itself undergoing a brand restructuring. After its acquisition by the US-based advertising giant Omnicom and the subsequent merger with DDB Group, the newly forged entity will be known as DDB Mudragroup. Predictably, the brand got itself a new logo too (inset on the left) — one that strongly resembles the old.
However, the most surprising and signifi -cant change came in the form of the over-all business restructuring that the group has undertaken in order to simplify the business processes and streamline the business structure. After the overhaul, the group will have eight specialized agencies, namely; DDB Mudra, DDB Mudra Max, Mudra, DDB H&L, RAPP, Tribal DDB India, Water and Maatra.
MUDRA, TURNING OVER A NEW LEAF
Asus Transformer Prime BlackBerry PlayBook Apple iPad2
Nehatillowbcl
othfriedeswewhm
helpla
k Pincus,O, Zynga
I N B O X T H I S F O R T N I G H T
18 4Ps BUSINESS AND MARKETING 22 MARCH 2012
24 4Ps BUSINESS AND MARKETING 22 MARCH 2012
R E N D E Z V O U S L U T Z K O T H E
Sitting in the corner offi ce of the Maker Maxity Building in Ban-dra East (Mumbai), Lutz Kothe, Head of Marketing and PR,
Volkswagen Group Sales India is a happy man. Five years back, his fi rst experience with India though, had started on a dif-ferent note.
Bitter would be the word. Straight out of the airport, at 3 am on that winter March morning of 2007, Kothe reached The Park (a fi ve star hotel in Central Delhi, where he was supposed to put up for a few days). He was exhausted. To his horror, he realised that ‘no’ room be-ing booked in his name. When he tried to convince the hotel staff into giving him a room, claiming to be a VW, all he got was a blank stare at the hotel recep-tion area. “I could see questions on the face of that hotel staff. He would have been satisfi ed even if I had told him that VW makes clothes,” recalls Kothe. That was the fi rst time Kothe realised the power of the VW brand in the Indian market. That it had no recognition!
Kothe feels different about India to-day. And so does India about Volkswagen. This outcome is a result of four years of toil. In the past four years, he has been busy at making the VW brand bigger amongst Indian consumers. And going by the results, one can say that he has
done well. Today, the company com-mands a healthy 10.22% share in the mid-sized sedan segment, with its Ven-to brand becoming an overnight best-seller. Even in the small car segment, where Maruti rules, the company’s Polo brand is loved by quite a handful. Proof: a 4.7% share in that segment.
As our discussion on the Indian miles covered by the company began, an ex-cited Kothe volunteered to share with us the slideshow he had prepared for a company board meeting scheduled for the following day. We learnt how the company management had made a con-scious decision that for the fi rst two years beginning 2007, brand Volkswagen would keep a low profi le, while at the same time, test market its products like the Jetta and Passat. Once the brand got recognised, the company got aggressive about advertising. Remember the road-block activity in leading dailies from Volkswagen in November 2009? It was around the same time when Kothe was ‘formally’ handed over the reins of the brand in India. Then, VW’s brand aware-ness in the country was a meagre 8% (as per Kothe). That campaign was followed by others like the Polo Die-Cut, Painting the newspapers Blue for Think Blue, Speaking Newspaper and the Silver Jacket for Jetta. Today, the brand’s aware-
ness has crossed the 75% mark.VW has been able to shake off all com-
petitive pressures. How? All thanks to its unconventional approach towards allo-cating marketing spends. “The trick behind the Volkswagen success story is: Hit hard and big to create awareness and then go very selective,” he shares. For every new launch or campaign, the com-pany has followed the same strategy of creating a buzz with one huge campaign in print and then targeting the core audi-ence through digital media and selective TV channels. “When you want to create a nationwide impact, you can rely only on TV. But it is very costly. Plus it is clut-tered. So we start with newspapers and then go only into digital media or do TVCs but on very selective channels,” he adds. Such an approach has fuelled the company’s sales in India over the years. After selling 3,092 units in FY2009-10, VW India registered a y-o-y growth of 1,160.58% in the next year (FY2010-11) selling over 51,608 units in the domestic market. Between April 2011 and Jan 2012, the company has sold 63,426 units (a y-o-y rise of 74.08%).
As far as plans go, the German auto major has a plan to expand its market share to 10% by the end of 2018 (the same year by which it plans to achieve global leadership in the industry). But it
Personal Favourites!
BOSS TENNISSPORT BOOKAPPAREL BRAND
WALTER ISAACSON’S STEVE JOBS
HAVING A THICK SKIN FOR CRITICISM PAYS. IT DOES IN THE INDIAN AUTOMART. LUTZ KOTHE, HEAD OF MARKETING, VOLKSWAGEN INDIA, SHARES WITH 4PS B&M HOW HE OVERRULED CONVENTIONAL WISDOM, HIT COMPETITORS HARD AND SO FAR, HAS WON
Pawan Chabra
TAKING VOLKSWAGEN TO MARKET, THE ‘UNCONVENTIONAL’ WAY
22 MARCH 2012 4Ps BUSINESS AND MARKETING 25
is not just sales numbers that are on Kothe’s mind. “The aim is to create a world around all our brands,” he added with a smile. The com-pany today has 101 operational dealers in the country and plans to increase that count man-ifold in the years to come as it expands into suburban and rural India.
Many do question VW India’s ad-spends. Their claim: the automaker is crossing the line. Kothe thinks otherwise. “The market is totally overestimating what we are spending. We are not even among the top 10 auto advertisers in India. But because we are doing it totally dif-ferently, so everybody assumes that we have the biggest ads and PR budget in the world, which is untrue,” says he.
From being a late entrant to becoming a po-tential leader in a cluttered market, from im-plementing strategies overnight to making the VW brand shine, the road hasn’t been an easy one for Kothe. Perhaps the fact that cars have always been at the epicentre of his daily diaries, whether it be within the VW Group or without, has helped. He began his career as an adman, dishing out creatives for brands like Mazda, Volkswagen, Mercedes et al. In total, Kothe has 16 years of experience in ad-agencies (including DDB Needham in Dusseldorf, Intevi in Cologne and Springer & Jacoby in Hamburg). His long exposure to making ads have added great value to seasoning him as a marketer who executes campaign with ease and grace. It shows.
A typical day for him today starts with mak-ing breakfast for his children (Magne, 8 and Oleanna, 7) by 6 am and after dropping them to school, he steps into his offi ce by as early as 8 am. “By the time everyone is here in offi ce, I am almost through with my day’s work,” he says with a laugh. For this adman-turned-marketer, communication between the various depart-ments in the company is extremely critical.
Kothe doesn’t want to quote any count of his tenure at VW India, except that he has renewed his employment contract for 2-3 years more. For him, the possibilities of improvisations in performance of the company in the Indian mar-ket keeps him interested to stick around as long as he can. And that’s all that matters, besides the fact that his family members appreciate the cultural diversities of the country.
We had more questions to ask Kothe. But our two hour-long slot had ended. The white shirt-clad Kothe had addressed most of my concerns about VW India marketing and advertising strategy. Except one: how many years before he bids goodbye to India? Three more perhaps. Enough to make VW a bigger brand, we reckon. [At least, Kothe hopes so.]
INESS AND MARKETING 25
? Three more perhaps.bigger brand, we reckon. o.] 4Ps
Lutz KotheHead of Marketing and PR,
Volkswagen Group Sales India
