consumer behavior

SUB: CONSUMER BEHAVIOUR MAX MARKS: 100

Masters Program in Business Administration (MBA)

Note :- Solve any 4 Case Study

All Case Carry equal Marks.

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CASE I

Sunder Singh

Sunder Singh had studied only up to high school. He was 32-years of age, lived alone

in a rented room, and worked eight-hour shift at one petrol pump, then went to the

other one for another eight-hour shift. He had a girl friend and was planning to marry.

One day when he returned from work, he got a note from his girl friend that

she was getting married to someone else and he need not bother her. This was a

terrible shock to Sunder Singh and he fell apart. He stopped going to work, spent

sleepless nights, and was very depressed. After a month, he was running Iowan his

savings and approached his earlier employers to get back his job, but they would not

give him a second chance. He had to quit his rented room, and sold few things that

he had. He would do some odd jobs at the railway station or the bus terminal.

One day, nearly two years ago, he was very hungry and did not have any

money and saw a young man selling newspapers. He asked him what he was selling

and he told him about Guzara (an independent, non-profit, independent newspaper

sold by the homeless, and economically disadvantaged men and women of this metro

city). Sunder Singh approached the office and started selling the newspaper. He did

not make a lot of money, but was good at saving it. He started saving money for a

warm jacket for next winter.

He was reasonably happy; he had money to buy food, and no longer homeless

and shared a room with two others. One day, with his savings he bought a pair of

second-hand Nike shoes from flea market.

Sunder Singh is not unique among low-income consumers, especially in large

cities, in wanting and buying Nike shoes. Some experts believe that low-income

consumers too want the same products and service that other consumers want.

The working poor are forced to spend a disproportionate percent of their

income on food, housing, utilities, and healthcare. They solely rely on public

transportation, spend very little on entertainment of any kind, and have no security of

any kind. Their fight is mainly day-to-day survival.

QUESTIONS

1. What does the purchase of a product like Nike mean to Sunder Singh?

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2. What does the story say about our society and the impact of marketing

on consumer behavior?

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CASE II

Key to Buyers' Minds

Consumer buying research has turned a new leaf in India. The era of demographics

seems to be on the backbench. Now, Marketing Research people are less likely to first

ask you about your age, income, and education etc. Instead, there is a distinct shift

towards inquiries about attitudes, interests, lifestyles, and behaviour - in short

towards a study of consumers' minds called psychographics.

Pathfinders, the marketing research wing of Lintas, occasionally came out with

its highly respected "Study on Nation's Attitudes and Psychographics

(P:SNAP). The first in this series was released in 1987 with an objective to develop a

database of lifestyles and psychographics information on the modem Indian women.

The second was in 1993, and the third in 1998. Pathfinders choose woman for the

study because of the belief that more often than not, in urban areas, it is the woman

who makes buying decision.

The Pathfinders' study involves interviewing over 10,000 women over the

entire country and segmenting them in clusters according to their beliefs, attitudes,

lifestyles, and lastly their demographics profile. The idea is to identify groups of

consumers with similar lifestyles who are likely to behave towards products or

services.

For advertisers and advertising agencies, this profile helps enormously. For

example, an advertiser may want to give a westernised touch to a commercial. The

profile of the target customer, as revealed by this study, tells the advertising people

the perimeter within which she/he must stay, otherwise the ad may become an

exaggerated version of westernised India.

For the purpose of this study, Pathfinders divided the Indian women in 8

distinct cluster of varying values and lifestyles. Figures from two studies are available

publicly and are given below:

Cluster 1987 (%) 1993 (%)

Troubled homebody 15.9 18.3

Tight-fisted traditionalist 14.8 10.0

Contended conservative 7.0 9.3

Archetypal provider 13.0 8.8

Anxious rebel 14.1 15.8

Contemporary housewife 19.2 22.1

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Gregarious hedonist 8.7 6.6

Affluent sophisticate 7.3 9.1

The studies seek to track the macro level changes and movements within

these 8 clusters in a period of time.

We note from the table that in 1987, 8.7% of the women could be classified as

"gregarious hedonist" - those who consider their own pleasure to be supreme in life.

'In 1993, this figure fell to 6.6%. The "troubled homebody" segment - those with large

families and low-income, increased from 15.9% in 1987 to 18.3% in 1993.

Information, such as this, is obviously useful to assess the collective mood.

That's why Pathfinders have an impressive list of clients fort heir P:SNAP, which

includes Hindustan Lever, Cadbury, Johnson and Johnson, and Gillette.

SOME PSYCHOGRAPHICS PROFILES OF INDIAN WOMEN

Rama Devi, the Contended Conservative

The lady lives a 'good' life - she is a devoted wife, a dotting mother of two school-

going sons, and a God fearing housewife. She has been living her life by the

traditional values she cherishes - getting up at the crack of dawn, getting the house

cleaned up, having the breakfast of 'Aloo Parathas' ready in time before the children's

school-bus honks its horn, laying down the dress her 'government servant' husband

will put on after his bath, and doing her daily one-hour Puja. She fasts every Monday

for the welfare of her family, looks at the 'freely mixing' and 'sexually liberal'

youngsters with deep disdain and cannot understand the modem young woman' s

19reed' for money, jewellery, and jobs.

Her one abiding interest outside the household is the Ganesh Mandir that she

has visited every Wednesday, ever since she got married. She lacks higher education

and hence has little appreciation for the arts, the literature, and the sciences. Her

ample spare time is spent watching the TV, which is her prime source of

entertainment and information.

Shobha, the Troubled Homebody

Shobha married young to the first person she fell in love with, Prakash. Four children

came quickly before she was quite ready to raise a family. Now, she is unhappy. She

is having trouble in making ends meet on her husband's salary who is employed as

clerk in a private business and is often required to work up to late hours. She is

frustrated, as her desire for an idyllic life has turned sour. She could not get

education beyond high school and hence there are hardly any job opportunities for

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her. Her husband also keeps on complaining of the long hours of backbreaking work

he has to put in. He consumes country-made liquor routinely.

Shobha finds escape in Black and White TV soap operas and films that

transport her into the world of her dreams. She watches TV almost all through the

day and her children roam around in the locality streets and cannot expect any help

from their' ever-grumbling' mother. Purchases are mostly limited to 'essentials' and

any discretionary purchases are postponed till it becomes possible.

Neeru, the Archetypal Provider

Neeru epitomises simplicity. Her life is untangled. It runs on a set timetable with

almost clockwork precision. She works as a primary school teacher in a rural

government school about 50 kilometers from her district town residence. She is

married to a social worker in an NGO whose income is erratic. Her three children, two

teenaged sons and l0-year old daughter are getting school education.

The day begins with the lady getting up before anybody else and finishing the

household chores as fast as she can. There is no room for delay as the State

government 'Express' bus, on which she ravels to her school will be at the bus stop

across the road precisely at 8.00 A.M. If she misses that, the next ordinary bus comes

at 11.15 A.M, quite useless as it will reach her school only at 1.00 P.M. The school

closes at 2.00 P.M. There are private Jeeps running sporadically, but the fare is high

and Neeru does not believe in wasting hard earned money. Besides, she travels on

husband's 'free pass'. Neeru prides herself on her monthly savings ofRs.1000 for the

last many years. The money will go toward the wedding of her daughter.

Vandana, the tight-fisted traditionalist

For Vandana, saving money is 'in-born' discipline. When she was young and

unmarried, she remembers her mother was extremely tight-fisted and ran the

household in under Rs.800 per month. It was the necessity of those times as her

father retired at a princely salary of Rs.1800 per month. All through her childhood,

she saw deprivation and hardship. She would not join the annual class picnic in her

school days as it meant' avoidable expenditure'.

Now she is married and mother of two school going children. The husband

works in a bank as a clerk. He has taken all the loans that he could from the bank and

invested the money in real estate. As a result of monthly deductions toward

repayment of loans, his take home salary is now very little. But Vandana can manage.

The school dresses are sewn by her at home, the stationary required comes from a

wholesale market, and the books are second-hand from 'friends', cultivated for the

purpose. On birthdays, Vandana prepares a sweet dish at home and they spend on a

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film. There is a cow and calf at home, being kept as a source of revenue and milk.

She sells half the milk to a neighbour and the family consumes the rest. Life in

general is hard and frugal. There is a colour TV at home, but they disconnected the

cable connection ever since the rates went up. Now they watch Doordarshan only.

Aditi, the Anxious Rebel

Daughter of a Freedom Fighter, Aditi has always fought her values and principles.

People still remember when she walked out of the exam half in a huff as a mark of

protest against mass cheating' sanctioned' by the centre superintendent in a tough

paper. While every body else passed with high marks, Aditi failed.

Even though she repeated the paper, Aditi never learned to swim along the

flow. She always swam against the current. She joined the Communist Party in her

college and gave rousing speeches against the teachers and authorities. This resulted

in her getting very poor marks and left her jobless.

Later, Aditi joined an NGO and now works on social issues. She says she is a

creature of the mind, not materialism. Her favourite dress is a long flowing Kurta, and

slacks. She wears loosened hair and chappals. She reads voraciously. Financially, she

is independent and lives with her parents. Her disdain for the institution of marriage

and contempt for the modern Indian male keep her single and unattached. She will

continue-to be so as she prefers this status, but may adopt a baby later in life.

Reema, the Gregarious Hedonist

Just 19, and Reema is already divorced. Her father is a wealthy businessman. During

Reema's childhood, her father was mostly away in Dubai and Africa, trying to amass a

fortune. That he did but he lost on his chance to be a good father. Both his children

started feeling like' orphans' after their mother got involved with another man.

Reema was ever longing for her family when alone came Harsh, her private

high school tuition teacher. Harsh was all of 22 and very caring. He was tall,

handsome, and very popular in school and many girls had a crush on him. Reema was

sixteen then and a great fan of Harsh. For her, Harsh was a prize catch as he

combined the loving qualities of a father with a mix of being a good teacher. She was

soon dazzled and surrendered in a physical relationship.

Marriage followed. She never understood how Harsh changed overnight from a

caring father figure to a demanding husband. And she could never cope with the six

hours she had to spend in the kitchen everyday. Why should she do the cooking, she

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asked Harsh, as it was something that the 'Ayas' did? The reality of a humdrum

middle-class existence hit her hard and she soon walked out of 'the hell'.

Her father understood her need to recover and made her allowance rather

generous. He bought her a Red Sports Car and got her an admission in a private

college.

College is entertainment for her. She attends college only on days when there

is some function like a cultural evening or the sports meet. Now, Reema spends on

alcohol, dresses, parties, and holidays. She consumes a mood elevating drug every

evening and keeps sending SMS messages on her mobile to her friends all through

the night. For her, life means 'buying pleasure endlessly'.

Shruti, the Contemporary Housewife

Shruti is an urbane woman. She is well educated and genteel. She is an officer in a

national bank, and active in her club affairs and community activities. Socialising is

an important part of her life. She is a doer, interested in watching cricket, politics,

and current affairs. Her life is hectic as she has a lot to do for home and office

everyday. Still she often enjoys viewing movies on TV every week.

Shruti shops for Sarees, jewellery, and cosmetics for herself on a regular basis.

However, family needs come before her own needs. Her home is a double income

household and she has one kid. All the modern gadgets are present and the standard

of living is upper middle-class.

Momeeta, the Affluent Sophisticate

Momeeta was born Mamta, but elevated herself to Momeeta after marriage to a

business tycoon. Momeeta is an elegant woman with style. She lives in Mumbai

because that is where she wants to be. She likes the economic and social aspects of

big city living and takes advantage of her' contacts'. She has built up friendship and

cultivated the city bigwigs by inviting them to the numerous parties she throws in her

luxurious penthouse.

Momeeta is a self-confident, on-the-go woman, and not a homebody. She is

fashion conscious and clothes herself in the latest designer dresses. Even at 40, she

can carry off a mini with aplomb. She is financial very secure and hence does not

shop with care. She shops for quality, exclusivity, and the brand name, not the price.

She frequently travels abroad, buys expensive gifts for friends, and has an

international understanding on what is "chic" at the moment.

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Three psychographics profiles of Indian women and their food shopping habits:

Type I Type II Type III

Money conscious Careful shopper Gourmet/satisfaction

Food shopping is done on necessity and is postponed as long as possible.

Makes out shopping lists and makes weekly/ monthly purchases.

General liking for food shopping and food related activities.

Minimum amount of money spent. This is enabled through comparative evaluation of many shops, even if it takes more time.

Can purchase larger quantities if there is an incentive like lower prices or a gift scheme. Food budget is flexible.

Collects and files food recipes. Experiments with new food products and methods of cooking. Likes to exhibit her culinary skills to her friends and family.

Operates within the food budget. Does not buy larger quantities to save money.

Checks labelling for price, nutrition and expiry date information

Spends a lot of time in kitchen as preparing food is an enjoyable activity.

Price and immediate outflow of cash is the dominant purchase concern.

Goes for tried and trusted brands even if they cost a little more. This is an important purchase concern.

Food items are bought either based on the past satisfaction from them or for their novelty value. Unknown food items are purchased if they excite the senses. This is the dominant purchase concern.

Who fits in where?

Shobha, Neeru, and Vandana,

Shruti, Aditi, and

Rama Devi

Momeeta (she is a food lover).

(Prof Deepak Khanna, colleague, has developed these profiles based on his

perceptions of certain personality types).

QUESTIONS

1. Explain how the above-mentioned information is likely to benefit a

marketer?

2. Which of the above mentioned types are likely to respond to sales

promotion? Explain.

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3. A manufacturer of personal care products in the premium segment

starts frequent sales promotions. What is likely to be the impact on the

above-mentioned types?

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Case III

Star Airways

Star Airways offered passengers air services within the country and served a territory

of 18, 000 sq. miles with an expanding population of over 70 lakh of people who are

potential users of the airline services. The geographic diversity and scattered

business and commercial cities have led to steady increase in the number of people

who use air travel. The clientele includes business people, as well as individuals on

non-business trips, holidays, and leisure trips etc. As a result, the passenger traffic

had been increasing steadily since the firm started operations in 1983. In the last

three years, however, the growth has not been consistent with the growth pattern

showed by the company in the last fifteen years - as against a healthy growth of 13

per cent, the sales have marginally improved, registering a growth of 6 per cent.

The company's early success was due to the pioneering concepts used by it in

the airline industry, which was dominated by large private and government operators

with little market orientation. The launch of the company's services coincided with a

boom in the aviation sector and reduced government dominance, which opened up

the skies for private operators. Besides this, the company offered a host of

innovations in the customer service functions such as smaller and newer planes,

convenient schedules, free gifts, comfortable seats, exclusive terminals, express

baggage-check, and airport-to hotel transit for its first and business class clients. In

turn the fares charged by the company were premium in the category and almost 15

per cent higher than the industry average. The company president in the following

words justified this move: ''We are selling entirely on the basis of providing quality

experience to our clients. Our services, ambience, and commitment to safety and

time-bound schedule, all surpass the standards of the industry."

During the first ten years of operations the company faced no direct

competition. The only problems faced by the marketing staff were (a) the price, (2)

the need to convince clients that air service was more efficient than other

alternatives, (c) identifying the customers, and more importantly (d) developing the

image of a dependable service. The consumers, who till now were forced to put up

indifferent service offered by large government operators, did not offer much

resistance and were agreeable to try out new company. Once customers were

convinced, retaining them was very easy. Hence the company enjoyed immense

loyalty from its clients with almost 40 per cent of them being regular users. Sales

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were handled by the sales division as well as by some independent sales

representatives.

In early 1990s the company faced direct competition for the first time with a

new company coming up with smaller planes and all other advantages which were

previously associated with Star Airways. The growing business had made the market

very lucrative and hence in the next three years, four major competitors were also

vying for the market share. The company slowly lost to these competitors and could

manage to retain only 30 per cent of market share by the end of 1994. All the

competitors were engaged in aggressive promotion and soon started a 'price war' in

order to outdo one another. For the next six months, each of them offered big

discounts and gifts (such as TV / audio systems) with the return ticket on different

routes. The most profitable and commercia1ly viable routes were the major targets of

these price related competitions. The consumer was the ultimate beneficiary and in

short time, the companies started facing losses due to this price-cutting.

Star Airways had so far remained out of this ‘price-war’ and lost its market

share on the competitive routes very rapidly. It was able to retain the clients on

other routes, which were not a part of this intense competition. Unhappy an anxious

about this state of affairs, the company vice president, marketing, developed a

marketing plan with several components. The initial part of the plan consisted of a

market research done on a cross-section of existing clients as well as the clients of

competitors and the following observations were made :

Star Airways was considered a quality-oriented company but many felt that it

was getting stodgy.

The satisfaction with crew and schedules had declined over the last 5 years

amongst regular customers.

The clients felt that the airline was losing its edge over customer service

because it was nonflexible.

The prices offered by competitors are less and they provide only a fraction of

services offered by Star Airways. This was the main reason of clients switching

over to competitors. As many as 70 per cent respondents considered the costs

as the most important factor in deciding on the airline.

Some deciding factors and their relative importance to clients were found to be

following this pattern.

Feature offered by

airline

Importance of feature

as the deciding factor

Rank of feature in decision

making influence

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Price 67% 1

Ambience and food 9% 3

Punctuality 14% 2

Services & convenience 7% 4

Free gifts etc. 3% 5

The second phase of the plan included a massive advertising and promotion

plan. The VP marketing, Anil Saxena, felt that the company needed to advertise it's

dedication to quality and rebuild an image of being a customer-oriented airline. He

began discussions with the advertising agency to launch a campaign in the near

future.

After a month, the agency came out with the following recommendations:

The campaign is to be completed in four months time and the budget will be

351akh.

The company would reach 85% of target audience, once in a month by direct

mail.

Four times a month a TV commercial will be aired on a business show time. The

audience TRP is consistent and highest in this category of shows.

Star Airways would build the campaign theme around 'quality and customer

service initiatives' .

The direct mail letter would be sent to a database of 85,000 clients in four

months. The letter will contain information on the airline and again stress on

the same theme of' quality and customer service'.

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QUESTIONS

1. What is likely to be the decision process in case of choosing an airline?

2. Would this plan suggested by the vice president help in convincing the

customers to use Star Airways? Give your reasons.

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Case IV

Mouse-Rid

One hot May morning, Shobha, general manager of Innotrap India Ltd., entered her

office in Delhi. She paused for a moment to contemplate the quote, which she had

framed and hung on a wall facing her table.

"If a man can make a better mousetrap than his neighbour, the world will

make a beaten path to his door." She vaguely recalled that probably it was Ralph

Waldo Emerson who said this. Perhaps, she wondered, Emerson knew something that

she didn't. She had the better mousetrap - Mouse-Rid - but the world didn't seem all

that excited about it.

Shobha had just returned from a Trade Fair in Kolkata. Standing in the trade

show display booth for long hours and answering the same questions hundreds of

times had been tiring. Yet, this show had excited her. The Trade Fair officials held a

contest to select the best new product introduced at the show. Of the more than 150

new products, her mousetrap had won first place. Two women's magazines had

written small articles about this innovative mousetrap, however, the expected

demand for the trap had not materialised. Shobha hoped that this award might

stimulate increased interest and sales.

A group of investors who had obtained rights to market this innovative

mousetrap in India had formed Innotrap India in January 2001. In return for marketing

rights, the group agreed to pay the inventor and patent holder, a retired engineer, a

royalty fee for each trap sold. The group then appointed Shobha as the general

manager to develop and manage Innotrap India Ltd.

The Mouse-Rid, a simple yet clever device, is manufactured by a plastics firm

under contract with Innotrap India Ltd. It consists of a square, plastic tube measuring

about 6 inches long and one and one-half inches- square. The tube bends in the

middle at a 30-degree angle, so that when the front part of the tube rests on a flat

surface, the other end is elevated. The elevated end holds a removable cap into

which the user places bait (piece of bread, or some other titbit). A hinged door is

attached to the front endofthe tube. When the trap is "open", this door rests on two

narrow "stills" attached to the two bottom corners of the door.

The trap works with simple efficiency. A mouse, smelling the bait enters the

tube through the open end. As it moves up the angled bottom toward the bait, its

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weight makes the elevated end of the trap drop downward. This elevates the open

end, allowing the hinged door to swing closed, trapping the mouse. Small teeth on

the ends of stills catch in a groove on the bottom of the trap, locking the door closed.

The mouse can be disposed of live, or it can be left alone for a few hours to suffocate

in the trap.

Shobha felt the trap had many advantages for the consumer when compared

with traditional spring-loaded traps or poisons. Consumers can use it safely and easily

with no risk for catching their fingers while loading. It poses no injury or poisoning

threat to children or pets.

Shobha's personal and informal inquiries with acquaintances and friends

suggested that women are the best target market for the Mouse-Rid. Most women

stay at home and take care of household chores and their children. Thus, they want a

means of dealing with the mouse problem that avoids any kind of risks. To reach this

market,

Shobha decided to distribute Mouse-Rid through grocery stores, and

kitchenware stores. She personally contacted a supermarket and some departmental

stores to persuade them to carry the product, but they refused saying that they did

not sell such contraptions. She avoided any wholesalers and other middlemen.

The traps were packaged in a simple cardboard, with a suggested retail price

ofRs.150 for a piece. Although this price made Mouse-Rid about five 1;0 six times

more expensive than standard traps, those who bought it showed little price

resistance.

To promote the product, Shobha had budgeted approximately Rs. 300,000

toward advertising in different women's magazines, such as Grah Shobha, and Good

Housekeeping. Shobha was the company's only salesperson, but planed to employ

sales people soon.

Shobha had forecasted Mouse-Rid's first year sales at 2 million units. Through

Aril, however, the company had sold only few thousand units. She wondered if most

new products got to such slow start, or if she was doing something wrong.

Shobha knew that the investor group believed that Innotrap India Ltd. had a

"once-in-a lifetime chance" with its innovative mousetrap. She sensed the group's

impatience. To keep the investors happy, the company needed to sell enough traps

to cover costs and make a profit.

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QUESTIONS

1. Has Shobha identified the best target market for Mouse-Rid? Why or

why not?

2. Does Shobha have enough needed data on consumer behaviour? What

type of consumer research should Shobha conduct?

3. What type of advertising can influence consumers for this type of

product?

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Case V

Golden Glow Soap

Anil Mahajan absent -mindedly ran his finger over the cake of soap before him. He

traced the name 'Golden Glow' embossed on the soap as he inhaled its unmistakable

sesame fragrance. It was a small soap, almost like a bar of gold. There were no frills,

no coloured packaging, and no fancy shape. Just a golden glow and the fragrance of

sesame and Lucida font that quietly stated' Golden Glow'.

Mahajan smiled wanly and clasped the soap in his hands, as if protecting it

from an unseen predator. He was wondering with quiet concern if the 30-year-old

brand would last long. Sensi India, where Mahajan was marketing manager, was

taking a long, hard look at the soap, as it was proving to be a strain on resources.

There were varying stories about how Golden Glow was launched. Some said

the brand was a 'gift' from the departing English parent company. Others claimed

that it was created for the then chairman's British wife, as the Indian climate did not

agree with her skin. They also claimed that the lady also coined the copy "The honest

soap that loves your skin" was also coined by the lady. The line had stuck through

three decades. Only the visuals had changed, with newer models replacing the older

ones.

Zeni was basically a speciality products company producing household

hygiene, fabricare, and dental care products. Golden Glow was the only soap in its

product mix, produced and marketed by Sensi. Its reliable quality and value delivery

had earned it a lot of respect in the market. Golden Glow equity was such that Sensi

was known as the Golden Glow Company. Indeed, the brand name Golden Glow

denoted purity, reliability, and gentle skincare.

In 1994, Sensi UK increased its stake in the Indian subsidiary to 51%. Within

months, all of Sensi's products were given a facelift, thanks to the inflow of foreign

capital. New packaging, new fragrances, new formulations and more variants were

introduced.

Only Golden Glow was left untouched. For, although it had a growing skincare

business following some strategic acquisitions in Europe in the early eighties, Sensi

UK was not a soap company. The UK marketing team ran an audit of every brand and

product in the company's portfolio. But when it came to Golden Glow, it faltered. "We

don't know this one," officials at the parent company said.

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"We don't want this one to be touched," Mahajan had said protectively, a

sentiment tliat was endorsed by the managing director, Rajan Sharma. "Golden Glow

is too sacred, we will leave it as it is," he said.

But the UK marketing team was confounded. What was a lone soap doing in

the midst of toilet cleaners and fabric protectors; they wondered, however they

somehow agreed that their proposed revamp strategy would only look at up-

gradation, not tinkering with what wasn't broken.

Indeed, for 30 long years no one had tampered with the Golden Glow brand.

And Mahajan felt there was no reason to start now. Golden Glow, in his view, was a

self-sustaining brand. That was a bit of an understatement because advertising for

the brand was moderate and Sensi India had never used any promotional gimmick for

it.

Now, after four years of nurturing the other categories, Sensi UK had decided

to launch its Vio range of skincare products in India. But Golden Glow's presence and

profile was a major roadblock to Vio's success. "It will create dissonance, confuse our

skincare equity and deter the articulation of Vio's credo. It will stand out as a genetic

flaw," argued the UK marketing head. "You need to do a rethink on Golden Glow."

Mahajan protested. "Why? It has such a strong equity and loyal following. So

much has been invested in it all these years. Why give up all that?"

Rajan, however, had another idea. "Let us then extend the Golden Glow

brand." He said It was the simplest solution. Companies were now investing heavily in

creating new equities for their brands. But in Golden Glow's case, Sensi was already

sitting on a brand with a terrific equity. He felt that extending this equity to other

categories, such as skincare products would be successful.

But Golden Glow needed a new positioning before it could be extended. Till a

few years ago, it had been in premium category, priced at Rs.15. Then new brands

with specific positioning and higher price tags entered the market. This created a

level above Rs.15 soaps and pushed Golden Glow down to the mid-priced range. So

Golden Glow's price was not commensurate with its premium position and image.

Over the years, Golden Glow had become so sacred that Sensi India had been

too scared to do anything to it. As a result, the soap was left with niche category of

loyal users. This category neither shrank or increased, just kept getting older and

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older, and with it the brand also kept growing older. For example, when Mahajan's

wife had her first baby at 25, her mother had recommended Golden Glow for her dry

skin and also for baby's tender skin because it contained sesame oil. That was in

1979. Today, Mahajan's daughter had turned 21 and was being wooed by Dove,

Camay, even Santoor, and Lifebuoy Gold, with their aggressive advertising. Golden

Glow had begun to lose its image of being contemporary as newer brands came in

with newer values.

Today, at 46, Mahajan's wife still used Golden Glow, but when she

recommended Golden Glow to her daughter, she said, "But Golden Glow is a soap for

mothers, for older people."

That was a major problem. The Golden Glow brand had aged, and Sensi India

hadn't even been aware of it. While its equity had grown with its users, its personality

had aged considerably in the last 30 years. "I don't think you can keep the personality

young, unless you keep renewing the brand. The objective now is to widen your

equity so that your image becomes young," continued Rajan. "For instance, if today

you were to personify a Golden Glow user now, it would be a woman of 45 years

using the same brand for many years, who is aver-se to experimenting, very skincare

conscious, very trusting, and very one-dimensional. As you can see, this is not a very

competitive personality. These are the strengths of our Golden Glow, but these are

also its weaknesses," he analysed.

The context had changed. Today, youth demanded brands that stood for

freedom and fearlessness. They demanded bold brands that dared to cure, not just

p;eserve. "Preservation is for old people. Those are the attributes being presented in

evolved markets," said Rajan. To make Golden Glow contemporary, the attributes had

to be re-framed, he felt. "You can't make a young brand trusting caring, loving,

without adding other attributes to it. Today, youth stands for freedom, for laughter,

for frankness, for forthrightness. That's what Close Up, Lifebuoy Gold, Vatika, and

other brands propagate. So, either come clean and say it is for older skin which needs

trust and kindness, or reposition the brand," said Rajan.

Repositioning was also necessary to address another anomaly in Golden

Glow's image: its perceived premium. Sensi India had been unable to do anything

about Golden Glow slipping into the mid-price range following the entry of more

expensive brands. Now, as Rajan mulled over the brand extension plan, Mahajan felt

that Golden Glow's premium positioning was its core equity and that had to be

maintained.

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"If you are premium priced in the consumer's mind, your extensions are

automatically perceived as premium. So, if you don't present the other products as

premium, the consumer will not see them as extensions of the brand," he said. "For

example, if you are to launch a shampoo which is priced lower than Sunsilk, but

higher than Nyle and Ayur, then whatever the rationale, the consumer will not accept

your product. "It is not the Golden Glow I know," will be the feeling," he said.

Mahajan felt that since premium positioning was one of Golden Glow's equity

values, it would be very difficult to convince consumers that the brand was being

extended without hanging on to this particular value. "Will they buy your rationale

that the very same values and equity would now be available at a low price? To be in

the premium segment now, you have to price it at Rs 35 or 40, almost on a par with

Dove," he said. "With Dove retailing at Rs 45, Golden Glow will be perceived as a

cheaper option."

"We can't simply raise the price," said Rajan. "What are we offering for that

increase? You can 't add value because you don't want to tamper with the brand. The

consumers will then ask, "Golden Glow used to be so cheap, what has happened

now? The user will forget that 15 years ago, Rsl0 was expensive, because all her

comparisons would be in today' s context," said Rajan.

"So what's the option?" asked Mahajan. "You don't have to be expensive to be

premium," said Rajan. Golden Glow already has the image of a premium brand,

thanks to its time-tested core values of purity, credibility, and reliability. What we can

do is reinforce the premium through communication and positioning. In fact) we

should have tinkered with Golden Glow long ago. That is what HLL did with Lux. It

also launched a bridge brand, Lux International, in the premium category," said

Rajan.

"How could we have done anything to the brand?" asked Mahajan. "The

product had such a strong following. It stood for gold, for sesame oil, for its subtle

earthy perfume. We changed the packaging periodically, but that's all we could do.

Remember the time we brought out a transparent green Golden Glow with the

fragrance of lime? It bombed in the market."

Rajan was not in favour of the premium positioning. It appeared very short

sighted to him, given the bigger plan to extend the brand. "Where are the volumes in

the premium segment? He asked. "For some reason, every manufacturer feels that

skincare can be an indulgence of only the moneyed class. As a result, there is a

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crowd in the premium end of the market. Do we want to be yet another player in the

segment?"

Fifteen years ago, Golden Glow was perceived as a premium product. But

today, globa1brands like Revlon, Coty, and Oriflame were delivering specific premium

platforms. Golden Glow did not have a global equity. 'Let us revisit the brand and

examine what it stood for 15 years ago and examine the relevance of those attributes

in today's context," suggested Rajan. "Golden Glow stood for care, consciousness,

love, quality and all that. But today, are these enough to justify a premium position?"

he asked Mahajan. "These attributes are viable in the mid-priced segment." He said.

"The mid-priced brand is the proverbial washer-man's dog," said Mahajan.

"You don't know whether you are at the bottom end of the premium range or at the

top-end of the low-priced range. You end up creating an image of being on the

opportunity fence. It is a mere pricing ploy, with no strategic value."

QUESTIONS

1. Discuss the nature of problem(s) in this case?

2. Suggest the kind of consumer research needed?

3. How should Golden Glow be positioned/ repositioned to bring about the

desired change among consumers? Give your reasons.

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CASE VI

Impact of Retail Promotions on Consumers

Shoppers' Delight, a large retail store, had above-average quality and competitive

prices. It advertised its retail promotions in local newspapers. Its TV advertising was

mainly aimed at building store image and did not address retail promotions. The

management knew it well that they had to advertise their retail promotions more, but

they did not feel comfortable with the effectiveness of present efforts and wanted to

better understand the impact of their present promotions.

To better understand the effectiveness of present efforts, a study of

advertising exposure, interpretation, and purchases was undertaken. Researchers

conducted 50 in-depth interviews with customers of the store's target market to

determine the appropriate product mix, price, ad copy and media for the test. In

addition, the store's image and that of its two competitors were measured.

Based on the research findings, different product lines that would appeal to

the target customers were selected. The retail promotion was run for a full week. Full-

page advertisements were released each day in the two local Hindi newspapers, and

also in one English newspaper that devotes six pages to the coverage of the state.

Each evening, a sample of 100 target market customers were interviewed by

telephone as follows:

1. Target customers were asked if they had read the newspaper that day. This was

done to determine their exposure to advertisement.

2. After a general description of the product lines, the respondents were asked to

recall any related retail advertisements they had seen or read.

3, If the respondents were able to recall, they were asked to describe the ad, the

promoted products, sale prices, and the name of the sponsoring store.

4. If the respondents were accurate in their ad interpretation, they were asked to

express their intentions to purchase.

5. Respondents were also asked for suggestions to be incorporated in future

promotions targeted at this consumer segment.

Immediately after the close of promotion, 500 target market customers were

surveyed to determine what percentage of the target market actually purchased the

23


promoted products. It also determined which sources of information influenced them

in their decision to purchase and the amount of their purchase.

Results of the study showed that ad exposure was 75 per cent and ad

awareness level was 68 per cent and was considered as high. Only 43 percent

respondents exposed to and aware of the ad copy could accurately recall important

details, such as the name of the store promoting the retail sale. Just 43 per cent

correct interpretation was considered as low. Of those who could accurately interpret

the ad copy, 32 per cent said they intended to respond by purchasing the advertised·

products ' and 68per cent sad they had no intention to buy. This yields an overall

intention to buy of 7 per cent. The largest area of lost opportunity was due to those

who did not accurately interpret the ad copy.

The post-promotion survey indicated that only 4.2 per cent of the target market

customers made purchases of the promoted products during the promotion period. In

terms of how the buyers learned of the promotion, 46 per cent mentioned newspaper

A (Hindi), 27 per cent newspaper B (Hindi), 8 per cent newspaper (English), and 15

per cent learned about sale through word-of mouth communication.

The retail promotion was judged as successful in many ways, besides yielding

sales worth

Rs 900,000. However, management was concerned about not achieving a

higher level of ad comprehension, missing a significant sales opportunity: It was

believed that a better ad would have at least 75 per cent correct comprehension

among those aware of the ad. This in turn would almost double sales without any

additional cost.

QUESTIONS

1. Why would some consumers have high-involvement levels in learning

about this sales promotion?

2 Is a level of 75 per cent comprehension realistic among those who

become aware of an ad? Why or why not?

3. Do you think such promotions are likely to influence the quality

image of the retail store? Explain.

24

consumer behavior

Business

consumer behaviour max

singh sunder singh

case study

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study of consumers minds

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lowincome consumers

respected study