There is more to 5Ps of marketing than what the text-books can tell you. Any basic course in marketing would talk about getting the 5Ps — Product, Price, Positioning, Promotion and People — right for success in the market-place. But it is one thing to have a deep understanding of the theoretical framework and quite another to execute it successfully in the real world.
The latter is a lot more complex and the nuances of individual products can often be such that translating concepts from the text-book into practice can challenge the best marketing brain in the world. This was borne upon me quite forcefully the other day, while going through the transcript of a conference-call that the management of Bajaj Corp had with a group of research analysts from various broking outfits.
Now, none of us are naïve enough to regard the entire range of personal products as one homogenous product category within the broad universe of fast-moving consumer goods. The way the 5Ps apply to, say, deodorants is completely different from how a fairness cream needs to be marketed to aspiring customers. But I would have thought that there would be little disagreement in seeing ‘hair oil’ as a homogenous category offering the value proposition of keeping the neatly combed hair in place instead of flapping all over. As it happens, I couldn’t have been more wrong.
Falling volumes
Take the first proposition under the 5Ps, ‘Product’. Is hair oil beginning to seem less of a product than it had been some time earlier? Well, at least, for consumers in the South that would seem to be the case if claims of Bajaj Corp, is anything to go by. The latter contributes just a mere 4 per cent of the total revenue .
The managing director of the company is on record to the effect that it is not a significant revenue generator for Dabur, another major player in the hair oil market either. Maybe people in the South simply prefer to leave their hair dry-combed or to have it combed slickly back with oil bought from the local oil miller. Either way, they raise questions about the relevance of branded hair-oil from the organised sector, as a product.
The problem, it would appear, is actually even more serious. Nationally, too, in volume terms, the hair-oil market grew just 0.5 per cent in a whole year. When you consider that the population has grown by roughly two per cent per annum, one will have to seriously pose the question if there is at all a product for which the marketer has to find answers for the remaining 4Ps. The bottom-line is this. There is a danger of one of the Ps (Product) slipping right under the marketer’s nose before he begins to even realise it.
Competing categories
There is another dimension to the ‘Product’ aspect in the hair oil category. Customers do not want their hair-oil to be some sticky viscous substance that would glisten in the afternoon sun. They want it stripped of its viscosity (‘light hair oil’, in trade parlance) as that segment has grown by 6.6 per cent even as the overall market has grown only 0.5 per cent, as mentioned earlier.
Throw in the fact that there is another category called ‘cooling oil’ (the kind made famous by Amitabh Bachchan as Brand Ambassador for ‘Navratna Tel’, a competing brand to the one marketed by Bajaj), apart form ‘Ayurvedic’ and ‘coconut’, and so on, and you begin to see the bewildering variety of products requiring their own solutions on the question of price, promotion, positioning and people within the hair-oil category.
Promotion is another challenging issue. How do you build a viable market for a hair-oil brand? Unlike food brands, or even oral health-care, for that matter, where a certain degree of brand loyalty can be expected to develop over time, it is fair to say that consumers tend to be generally fickle when it comes to preferences in hair-oil brands. The promotion has to be built around better grooming or nourishing of the hair or such abstract attributes that are just as difficult to disprove as it is to get the consumer to try the product.
Promotional expenses
This has huge implications for advertising and sales promotion expenses. Until you hit reasonably viable sales volumes at the retail outlets, your advertising and sales promotion budget is almost certain to wipe out the gross margin.
The CEO of Bajaj Corp, while responding to criticism (in the course of the con-call) that the company is not pushing its products in the Southern market, said that the reality of the market is that the company’s marketing communication has to be relentless so as to attract 100 consumers; and then only 10 or 15 would come back for a repeat order.
If the base is not very large you could very well end up blowing away the entire gross margin on advertising and sales promotion expenses. There comes a time when the company says: “This is it, we are not going to push our product in this market, any more”. That raises another interesting challenge. How does the company design a ‘loyalty’ programme that effectively returns the monies spent on advertising and sales promotion as, for the repeat customer, the advertising outlay is not adding value to his purchase.
Positioning
Of course, it is another matter if the product promises to put hair on your scalp in thick clumps or promises to stop falling hair. The marketing professionals describe this as a product in the ‘problem-solution’ category. It is a sort of ‘You have got a bald pate (problem) and we have got a product (solution) for you’ type of situation.
But such claims are harder to make and a company has to be ever mindful of strictures from the advertising standards council or, worse, being dragged to consumer court by some disgruntled customer. Quite apart from that, such positioning puts the product in a narrow niche-market category. Sales volumes are bound to be smaller. But, more importantly, the company has to shift the distribution focus away from general/provision stores to chemists and pharmaceutical outlets.
The moral of the story is this. Text-books can only lay down the path in very broad terms. While you want to venture out into the market without being fully armed with bookish knowledge, you wouldn’t want to count on it wholly, either. Your experience, intuition and the skill to make tangential connections from observations matter a great deal more.