Cover Story

Marketing Shortcuts That Cut Short Your Success

Some successful organizations at times get carried away by their past success, and the complacency thus induced renders them intellectually arrogant, eventually leading to marketing mishaps. This article captures some of the biggest marketing goof ups in recent times and the learning from these catastrophes. It attempts to develop a framework for marketers to scrutinize and pre-test their strategies and plans to avoid denting the companys reputation and image, and consequent financial losses. Good marketing is no accident but a result of careful planning and execution Philip Kotler Business leaders all over the world have come to accept the fact that a strong marketing base is a prerequisite for the financial success of an organization. While sound marketing strategies and well conceived plans greatly enhance the chances of an organizations success, half baked plans and hastily laid out tactics undoubtedly spell doom for organizations, however great their past performances be. Before going into details of the subject, it would be appropriate to understand the essence of the strategic marketing process. Strategic marketing is all about understanding, creating, delivering, communicating and sustaining customer value. Marketing plan is the key document that directs and controls the marketing effort. It operates at two levels, viz., strategic plan which identifies the target markets and the value proposition to be offered; and tactical plan which focuses on the four elements of the marketing mix, viz., product, price, place and promotion. Needless to mention, the success of a marketing plan depends as much on strategic planning as it does on the tactical aspects of marketing. An otherwise good strategy, if not properly implemented, is a great opportunity lost and can set the organization back by a few years. Marketing in the 21st century has become highly challenging, thanks to globalization, rapid technological advancements, economic liberalization, privatization of business, enlightened customer groups and retail explosion. Sam Hill and Glenn Rifkin (1999)1 set the rules of the game in their famous book Radical Marketing. According to them, CEOs themselves should own the marketing function and use market research cautiously. They should hire passionate missionaries and not traditional marketers.

Sam Hill and Glenn Rifkin, Radical Marketing, Harper Collins, New York, 1999

Apart from grappling with the above challenges, multi-national corporations (MNCs) which strive to enter emerging markets face the additional challenge of understanding the socio-cultural aspects of these markets. As categorically stated by C. K. Prahalad (2005)2 the best practices of MNCs do not work in emerging markets and what they need are next practices.

Marketing Fiascos in Recent Times

Let us now look at some of the goof ups by marketers in recent times with the specific purpose of understanding why things went wrong and whether anything different could have been done to prevent these mishaps. Of course, one is always wiser after the event. But as long as one learns from the mistakes of others, recounting such events, apart from the element of hilarity associated, becomes an important learning tool. Merits Small 'n' Flaccid Campaign During the late 1990s, Merit one of the American cigarette brands - had launched a $450 million ad campaign with expectations of making it to the top of the $800 billion cigarette industry; but instead, got pushed it to the bottom of the market. The campaign and its slogan, "Merit - Makin' You Feel All Small 'n' Flaccid" was a complete disaster. Though the focus-group data and statistical analysis indicated a strong psychological reaction to the word 'flaccid' among 35 to 50-year old males, the company had gone ahead with the campaign. No wonder, sales of Merit brand cigarettes plummeted to an all-time low of 12 packs per week, as against the earlier figure of 20 million per week! This campaign had allegedly beaten all previous records for advertising failure by a wide berth, earning an average of 0.035 cents in sales returns for every $500,000 spent. By hindsight, Merit and its campaign managers grossly misjudged the negative impact of the phrase small 'n' flaccid on customers psyche, which resulted in their running away from the product rather than buying it. McDonald's Giveaways: Customers Not Lovin' It In August 2006, General Motors (GM) and McDonald's, both of them well established players in their respective markets, joined hands to give away 42 million toy Hummers in Happy Meals meant for kids. GM hoped the promotion would help market its Hummer brand automobiles to parents through their children. However, parents and environmentalists immediately voiced their displeasure, as both the companies admitted that they were trying to market the vehicle to parents through their children. After a couple of months, another giveaway caused serious damage to McDonalds image. In October 2006, a promotion to give away 10,000 MP3 players branded with the McDonald's logo in Japan backfired very badly, when the users discovered that their free
2

C. K. Prahalad, Learning to Lead, Vikalpa, IIMA, Volume 30, No2, April-June 2005

MP3 players came with a Trojan virus, which stole and sent their user name, password and other private information to hackers, when they plugged into their PCs. It is not difficult to imagine what reactions this awful episode would have elicited from the otherwise docile Japanese customers. Reliance Infocom In July 2003, Reliance Infocom launched its Monsoon Hungama Scheme under which a mobile handset and post-paid connection were offered at a throw away price of Rs. 501. This was such a phenomenal success that the company could woo more than one million subscribers in just 10 days. In a bid to penetrate the market, Reliance did not lay down some of the basic rules before appointing distributors/dealers. This led to phones being sold without proper verification of customers credentials. On top of this, the company was not geared up to handle such a large number of customers, resulting in massive billing and collection problems. Customers simply used the phones and threw them away (After all it was bought at a throw away price. Was it not?) without paying their bills. As admitted by the Chairman Mukesh Ambani at the companys Annual General Meeting in 2004, "This unprecedented response gave rise to logistics, billing and collection problems. Reliance allegedly lost in excess of Rs. 1,500 crore. The Indian market has witnessed many instances of marketing mistakes - positioning a brand at the wrong audience, pursuing the wrong brand strategy, pricing a product too high for the market or too low to be profitable, launching the right product at the wrong time or tampering with a product without proper market research. The list goes on. Even the most admired companies sometimes mess up their strategies in terms of pricing, distribution, logistics, product support services, timing of new product launch and promotion. Global Giants and Local Brands Sometimes, one cannot fathom why after acquiring certain local brands for hefty sums, some MNCs try and kill them. Swedish durable major AB Electrolux, which decided to pursue a single brand strategy, dumped the Kelvinator brand one fine morning in 2003 without batting an eyelid .This was a brand acquired by it a few years earlier, by making a huge pay out. A well known brand in India since the 1960s, Kelvinator commanded sizeable brand equity, which Videocon, the new owner of this brand, has smartly leveraged by re-launching it. Coca-Cola almost killed ThumsUp, the market leader then, in its stubborn effort to make Coke the top cola brand in India. When Coca-Cola took over ThumsUp in 1993, the Indian brand had a 60 per cent market share. By 1998, this had plummeted to 15 per cent (but still ahead of Coke), while Pepsi emerged the top soft drink brand. Clearly, Cokes goal of acquisition was focused on gaining the distribution network and promoting the Coke brand. It simply had no well-defined strategy to nurture acquired brands. But

eventually, the company realized that ThumsUp had a distinct market of its own, whose space could not be taken by Coke, and began to promote it. GlaxoSmithKline Consumer Healthcare (GSKCH) already had a 70 per cent share in the health drinks market through Horlicks and Boost when it picked up Maltova and Viva brands from Jagatjit Industries during the year 2000 for Rs. 86 crore. GSKCH, however, failed to get any mileage out of the acquired brands largely due to integration issues and growing competition from Cadburys Bournvita. Today, Maltova and Viva are literally the vestiges of past (or lost) glory. Likewise, FMCG major Hindustan Lever Ltd (HLL, now HUL), during its foray into icecreams business, acquired not one but three brands - Kwality, Milkfood and Cadburys Dollops - during the mid nineties. After a few years, all the three acquired brands were merged with Levers global flagship brand - Walls. HLL ventured unsuccessfully to position Walls as a mass-market product (it launched the softy ice cream) and when the volume metrics did not look exciting, repositioned it as a premium brand confined only to six metros. The company is still struggling to establish itself in this category. HLL evidently did not display the same speed and enthusiasm in nurturing the market as it did in acquiring the established brands. All the organizations referred above are world class; but not some of their strategies. Some more examples of such unsuccessful endeavors by leading companies in India are listed at Exhibit 1. Exhibit 1: Some Products That Never Picked Up
Opel Astra: General Motors still does not know what went wrong with the fuel guzzler. Enfield Bullet: It is still popular with hardcore bikers, but experts consider it technically dead. Reva: At over Rs 2.5 lakh, the battery-operated two-seater failed in the market; as besides the problems with battery, riders were also gasping for air and space inside the car. Versa: Was it the positioning? Even the charm of Bachchans could not sell this Maruti offering. Zen Diesel: Poor technology, crude design, bad engine. Nothing was right for it, except the model Zen and the company Maruti. Sunfill: Coca-Colas soft drink concentrate failed to take off in India. Binatone: The UK-based consumer electronics company failed in India, probably because, in Hindi, its name ("bina tone") means "no sound. Source: Oops! Youve missed it, Pummy Kaul et al, Outlook Business, 20th September 2006

Cross-Cultural Challenges

Nothing sucks like an Electrolux. This is not a prank by a graffiti enthusiast. It is in fact the tag line of one of the advertisements inserted by the Scandinavian durables giant in American magazines. The famous catch line of Pepsi - Come alive with the Pepsi generation, became Pepsi will bring your ancestors back from the dead, thanks to an overenthusiastic Taiwanese translator. The catchy KFC3 slogan finger lickin good came out as eat your fingers off in Chinese. Chery Nova introduced by General Motors in Latin American markets, which are predominantly Spanish speaking, was not a success for the simple reason that no-va means a thing which does not move in Spanish, forcing GM to re-launch this MUV (multi-utility vehicle) as Caribe. Procter & Gamble, which launched Cheer detergent in Japan, heavily relied on the advertising campaign that highlighted the products capability to wash clothes at all temperatures, overlooking the fact that Japanese washed their clothes with cold water. What a meaningless exercise! More instances of such hilarious goof ups are presented at Exhibit 2. Exhibit 2: Advertising Blues
When Parker launched a ballpoint pen in Mexico, its ads were supposed to say, It wont leak in your pocket and embarrass you. But the ad screamed, It wont leak in your pocket and make you pregnant! This happened because the advertising company thought the Spanish word embarazar meant embarrass. The Rs. 13,000-crore Indian advertising industry too has had its moments of embarrassment, sometimes leading to litigation and complete setback to the product. Here are some examples: Pepsi: A TV commercial for the soft drink aired in 2004 showed a 10 year-old boy negotiating a dangerous route to reach the Indian cricketers with a tray of Pepsi. It angered child labor activists, and the Hyderabad High Court ordered Pepsi to withdraw it. Temptations: On August 15, 2002, Cadburys came up with a print ad comparing its Temptations brand of chocolate to the disputed territory of Kashmir and describing both as "too good to share". It evoked strong opposition from all around, including the then Prime Minister A. B. Vajpayee. Tuff: This print campaign of the shoe brand came under public ire because the models Milind Soman and Madhu Sapre posed nude. It was banned. India Shining: The Rs. 100-crore India Shining campaign, handled by Grey Worldwide, focused on the BJP governments achievements. The punch lines, duration and execution of the campaign were all in sync. However, the ad targeted only the higher socio-economic classes. Many among the masses, which went to vote, had no access to the ad media. "The wrong choice
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Kentucky Fried Chicken

of medium and target audience resulted in a complete back fire," pointed out Devashish Dasgupta, Assistant Professor, Marketing, Indian Institute of Management, Lucknow. Source: Oops! Youve missed it, Pummy Kaul et al, Outlook Business, 20th September 2006

Framework for Avoiding Marketing Pitfalls

One can go on and on, narrating such fiascos in Indian and global markets, of which there seem to be no dearth. But what are the learnings from these debacles? 1. Resist the temptation of listening to your heart While personal preferences or gut feelings may sometimes turn out to be master strokes, in business, such short cuts are more often fraught with consequences that could be disastrous. One should not allow ones professional arrogance dominate the decision making process. KISS (Keep it simple, stupid) is the watch word. Going back to basics before entering new markets or launching new products, cannot be traded off with intuitive thinking. A case in point is Kelloggs whose breakfast cereal did not meet with the expected success in the Indian market. Unfortunately, Kelloggs short circuited the product-market development process and paid a heavy price. It got carried away by the success back home in the United States and European markets. If only the company had taken recourse to extensive consumer research, product testing and test marketing, which are the steps suggested in any standard text book for launching a new product (for the Indian market it was certainly a new product) Kelloggs would have saved itself the blushes at the market place, and more importantly, monetary losses. 2. Let all the departments/divisions work simultaneously on new product launches This point is illustrated very well by Lafley and Ramcharan (2008)4 in their famous book The Game Changer. They suggest that there has to be perfect coordination between the various divisions right from the time the prototype is developed, as R&D cannot throw the new product over the wall to manufacturing and marketing. Logistics, distribution network, packaging, promotion and pricing are the important elements of a new product launch which need to be worked on much in advance and be in place when the product hits the market. Companies like Reliance Infocom can pick up a leaf or two from Lafleys book (literally) instead of resorting to shortcuts to expedite the product launch, and paying a heavy price later due to non availability of support systems and services. 3. Do not overlook local factors One of the common mistakes committed by MNCs trying to enter emerging markets is their obsession with the best practices. They seem to think that the strategies which had
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A. G. Lafley & Ramcharan, The Game-Changer, Crown Business, New York, 2008

been successful back home can just be replicated in emerging markets. This is a marketing myopia of a different kind, which stems from the ill-founded assumption that the emerging markets today are what the developed markets were 10 years ago. Unfortunately, marketing is not such a simplistic chore, and those who do not understand the basic nuances of a market end up paying a heavy price (in terms of reputation, time, money and opportunity). No wonder, companies like McDonalds, KFC, Nike, Kelloggs and Levis did not find the going smooth in India, as they overlooked the importance of market research at the grass roots level. Local tastes, preferences, socio-cultural-economic factors, and decision making processes have to be thoroughly researched to develop an in-depth understanding of any new market before making a foray into it. At this stage, involving local talent makes lot of sense, as thorough knowledge of local factors plays an important role in formulating strategies and plans. Companies like Samsung and Nokia understood the importance of glocalising their businesses by successfully blending the local talent with their best resources back home, and the success tasted by them in emerging markets is a testimony to their commonsensical approach. Unfortunately, common sense is not as common as it should be! 4. Have local consultants assist your communications team Marketing communications need to be localized to be effective. Having a good translator, unfortunately addresses only the fringe of the problem. While multinational companies embracing Integrated Marketing Communications is a welcome move, they should be extra careful when developing local content. Otherwise, they may end up in a mess which they had never bargained for, as brought out by some examples given earlier in this article. Like product testing and test marketing, advertisements too can be pre-tested before they are rolled out. There are a number of proven methods to pre-test advertisements for their content, visuals, appropriateness and effectiveness. But how many communications experts really adhere to the basics to avoid such costly mistakes, cited earlier in this article? Those who follow short cuts, however extenuating the circumstances be, face the bigger risk of becoming laughing stocks in the market place. 5. Have intellectual honesty to admit your mistakes Those who do not admit their mistakes and try to come out with quick-fix solutions to salvage the situation, often end up inflicting more damage to their organizations. A case in point is McDonald's desperate attempts to undo the damage caused by the controversial Hummer give away scheme, which caused further controversy. The company posted a blog which stated, "Looked at through children's eyes, the miniature Hummers are just toys, not vehicle recommendations or a source of consumer messages about natural resource conservation, greenhouse gas emissions, etc."5 But when the visitors to the blog clicked on the comments link to share their opinion, they noticed to
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Apryl Duncan, www.About.com (A part of New York Times Company), 2009

their dismay that their comments never showed up. This frustrated group of people did not remain quiet, but chose to vent their anger through other networking sites on the web. 6. Have a long term perspective If an organization is in a great hurry to milk the market, the chances of failure are much higher, particularly if it happens to be a global MNC trying to enter the market in a developing country. It takes time to understand the local culture, market conditions and consumer preferences and fine tune ones strategy. Sometimes, the strategies need to be revised midcourse based on market response. It took five to seven years for MNCs like McDonalds to establish themselves in the Indian market, as they had to localize their product, promotion, distribution and pricing strategies. Likewise, acquiring local brands without giving a strategic thought as to how such acquisitions are going to enhance ones competitive advantage in the long term, is a futile exercise that guzzles off precious resources.

Conclusion
While there cannot be any short cuts to success, even the most admired organizations sometimes get carried away by their intellectual arrogance, resulting in disastrous consequences. A more pragmatic and commonsensical approach, and adherence to the basic principles of business will definitely help organizations avoid pitfalls, particularly in new/emerging markets. Adaptability to local conditions and clever blending of local and global managerial talent will help businesses stay ahead of others. This however calls for leadership of the highest caliber. As Philip Kotler once quipped, Marketing is far too important to be left in the hands of the marketing department. Shailendra Dasari Marketing Faculty, IBS Bangalore shailendra.dasari@gmail.com