06 Feb 2020 17:21 IST

Nostalgia may have spurred revival but newness is the way forward

From Parle's Twitter handle

The brand must look to premiumise, move beyond digital platforms and keep innovating to retain interest

It was another summer evening in May 2004. I was eight years old, somewhat notorious as a big-time prankster and a hot-headed kid. Due to some trivial reason (not worth mentioning today, though it was like a crisis for me back then), I broke the console of my Nintendo by whacking it against the wall. While maturity hit me hard later, that eight-year old Shashank lost his last video game that summer. My mom vowed never to buy me a video game ever again.

I did continue to play games on our personal computer, but always longed for the video game. Fifteen years later, when I got my first stipend in May 2019, I wanted to relive that nostalgia of playing the video game again. First option, Nintendo. Though nostalgia did strike me while going through the console specifics, I ended up buying a PlayStation 4 (it is a beast, worth a buy).

Why? Wasn’t Nintendo — the brand in my memory — almost synonymous with video games? But the reason I veered towards a PlayStation 4 was the “#4ThePlayers since 1995” YouTube video by PlayStation, and so finally I bought it.

Now you realise how complicated nostalgia is? Is it for the brand? For the product? For the store? For the feeling? For the memory? Or just a time-pass story?

Parle Products decided to relaunch its Rol-a-Cola confectionery 13 years after its discontinuance in Indian markets after an organic Twitter campaign on #BringRolaColaBack. The company intends to generate ₹100 crore revenue over the next 12 months. The press has covered the nostalgia around Rol-a-Cola and Parle’s distribution network, but what is the most optimal strategy? Let me take you through it.

Nostalgia in seven points

Before we look at the kind of strategy that Parle Products could adopt to clock ₹100 crore sales in the next 12 months, it is important to understand how nostalgia plays out in different ways, so that a clue could be derived while designing the strategy.

1. Brand emotion works up to an extent: Super Plastronics Pvt Ltd (SPPL) got the rights to manufacture TVs as Thomson TVs. An erstwhile brand, the oldies (then of age group of 25-34 in Thomson TVs prime era) did embrace it and it has claimed to have gained less than 5 per cent market share. This shows that while emotion drove initial sales, beyond that, the product should speak for itself.

2. Core audience should be the same: Anand Mahindra got the famous Czech Republic origin JAWA bikes of the 1960-70s fame back in India. The people loved the nostalgia of using those bikes which were considered cool back then, but the sales did not pick up well during the initial days, as expected by the promoters. Reason: The audience back then is today 70+ years of age. Their age prefers safety over thrill. The new generation of Royal Enfield and KTMs find it difficult to associate with the brand. In another instance, SaReGaMa music, through Carvaan, was able to hit 1-million sales as its core target group just loved the no-frills music player. This group is in the 40+ bracket, and must have heard over 5,000 songs sometime over their lifetime

3. Brand should invoke an unsheddable tag: Bata, the synonym for school shoes (as promoted back then) is trying hard to woo the younger generation with a whole new range of offerings. But the brand is so strongly associated with school shoes, it is currently invoking a reverse nostalgia for the brand

4. Relevance of the old mantra: The Liril girl (bathing is fun) and the Onida devil (neighbour’s envy, owner’s pride) kind of ads are no more relevant in the current era, where women can’t relate to the ‘commodified’ image and electronic goods such as TVs are not a luxury any longer.

5. Memories are beyond the brand: Paper Boat’s campaign around how Aam Panna, JalJeera, etc. were a part of our young lives worked like magic and powered its initial success

6. Distribution triumphs nostalgia: What is the use if there is no product available even if the nostalgia card works? Similar issues are being faced by Paper Boat while trying to expand beyond Tier-III cities or, for that matter, Dabur still holding the pole position because Patanjali could not carry forward the nostalgia it created around Chyawanprash.

7. Distribution + right user connect = Success: - With O&M’s Piyush Pandey on their side, Pidilite did crack the user connect with their unforgettable and quirky advertising. Their efforts to partner and educate carpenters in the early 2000s is also a reason for non-obsolescence of their brand

With this, let me take you through the strategies for Rol-a-Cola. Each of the recommendations will discuss the possible approach Parle could take to achieve its target.

What promotional strategy should Parle adopt for Rol-a-Cola to appeal to the rural market?

With rural markets being the growth engine for any FMCG company, here is a 4-point strategy for the same

1. Distribution is still the gateway: The product being priced at less than ₹10, the nostalgia invoked would be for a moment, and one cannot expect this to translate to effort from the consumer’s end to procure the product. According to an Accenture report, 59 per cent of the rural sales depends on a strong distribution network. Identification of the right retailers and segments to make the product readily available is the key.

2. Stakeholder identification: Some 40 per cent of the sales in rural India happens due to good customer service translating to word-of-mouth. Being a small purchase item, the persuasion from retailers plays a role and could be incentivised accordingly.

3. No-frills and lower pricing: The USP of the brand, with rising disposable income in the rural areas and increase in discretionary spending at 19.2 per cent YoY, plus a low pricing strategy should make it a more obvious purchase.

4. Brand is magic: Parle commands greater respect and brand value in rural areas; thus posters and hangings about the product and wall-paintings about Parle as a brand should consistently create an imprint in the customer’s mind.

Parle has traditionally used a low-pricing strategy. Should it employ a different marketing strategy for Rol-a-Cola in urban and rural markets?

Parle should not adopt a new strategy in the urban markets; rather, it should tailor the existing one with new additions. Here are three points on this:

1. Price and strong distribution should still be prioritised

a. With increasing household incomes in the urban areas, there are less than 150 million households with a salary of less than ₹5 lakh per annum. As Parle’s core consumer group is children, the youngsters from these 150 million households would naturally consider a cola candy over a Coco-Cola, based on their pocket money

b. The product is more of the “enhance the moment” kind than other confectionery items, driving a long-term association. Such moments are generally very price-sticky in nature. People still recall the old price they paid while purchasing this product.

c. The product should be an instant pick between other candies, with the first metric of consideration being price. A higher price point or deviation in communication of the price value proposition could hurt the product sales.

2. Brand magic must be re-enforced in digital era: Millennials, who brought this product back to the market love to try new brands, so the nostalgia line of advertising in digital media must consistently be driving towards the product through fresh story-lines and other initiatives

3. Capitalizing on the opportunity: With a slowdown in consumption, which is expected to pick up by January 2021, most FMCG products have postponed the launch of their product for 9-12 months. Due to lower spends, people need a strong and compelling reason to buy a product in urban areas. Unlike rural areas where the spends are steady, in urban areas, spending is impacted by macro-economic conditions. In this case, nostalgia-based marketing could, first, drive new avenues for revenue and, second, capitalise on the non-existence of newly-launched products in the confectionery market.

What strategy should Parle adopt to ensure long-term sales of Rol-a-Cola?

To ensure consistent growth in sales for its longevity in the Parle products portfolio, here are some recommendations:

1. Look out for avenues for premiumisation: In the highly penetrated FMCG segment, companies are looking forward to generating revenue through premium pricing for their products. Premiumisation commands 27 per cent of total spends in highly penetrated segments, unlike 10 per cent in low-penetration segments. In India, the highly penetrated segments generate around 50 per cent of revenue through normal pricing while the rest comes through premium pricing and up-trading. A ₹20 package in modern trade outlets is not enough to command such pricing.

2. No to e-commerce; look beyond digital marketing: Segments like deodorants, skin care, baby care, etc. command higher penetration in the e-commerce segments over baked goods, confectionery and soft-drinks. The confectionery segment commands a penetration of less than 2 per cent, expected to rise to 5per cent by end of 2025, which is in the premium segment. Confectionery items like Rol-a-Cola cannot be sold on a regular basis from e-commerce sites as they do not fall into the planned purchases and high-ticket size categories. Parle should try to focus on promoting this candy beyond the digital space, as this restricts their digital-only plans to basic awareness creation, not facilitating the overall customer journey

3. Enhance the moment: A moment is lived once. Attempting to replicate it makes it routine, which would bore most people. Constant innovation (beyond packaging) must be focused on to make this product generate consistent revenues over the years.

Conclusion

To summarise, for Parle Rol-a-Cola to succeed in achieving its targets, the following pointers must be taken care of:

1. Nostalgia should be used only as a launchpad, while the long-term marketing strategy should be more like that for a new product and not from where it ended years back

2. Focus beyond digital is essential until premiumisation picks up for the product as no customer would prefer to make an e-commerce purchase of a low-priced product

3. Incremental innovation should be more frequent to maintain sales as the product is not a multi-purpose FMCG product (like Rooh Afza) or a necessary staple that finds its way into the weekly grocery list (like Parle-G).

 

(The Winner is a student of TA Pai Management Institute.)

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