01-09-2017 Nikhil Mathur, MD, South Asia, GfK
Remember the discussion about, 1, 2, 3 or 4 screens? Well, let’s fast track to a market which is ahead of the curve, India. The global smartphone industry has been steadily developing and growing in penetration. The growth has opened up volumes, but in selected markets, it has opened up in competition. Whereas the initial stages were in high-equipment markets such as North America and Europe, the boost and manufacturers’ focus now chiefly turned to other markets for alternate avenues for growth. With smartphone penetration maturing in many developed markets, continued growth in the world’s third largest smartphone market makes India an attractive market to device manufacturers.
Smartphones in India occupy a very unique marketing niche. From the initial meeting gambit, where it is not rare to see people opening up by stacking 2 or even 3 smartphones, to a not-so-unusual practise of having a “live” feature phone for usage and a “display” smartphone for show, your phone is at the heart of the individual presentation and representation.
Strong branding is key, as shows the relentless hammering of smartphone brands during major sports events such as the ICC, IPL Cricket matches, or the colorful shop branding. Beside the technology itself, what is also pushed are focused usage model such as selfies, video streaming, all of it underpinned with attractive pricing of course.
Don’t expect India to be a cheap market: it is a value for money market. The consumer is extremely aware of what he can get at what price point, and his choice will be made on all component of the “package”. Your pricing will be your image.
With demonetisation, and even more with the adoption of GST across India on the 1/7/2017, the focus has increased on distribution, and that as well hit smartphones. With 80% of a consumer accessing the internet through his phone, but also 80% of the market still sold through shops, channel distribution, online and offline, is a key factor to fuel growth and drive sales.
The question is on the actual churn, the replacement of the smartphone, what are the critical points to look for, for consumers that won’tpurchase new phones on a whim. With new models and brands being introduced to the marketplace at a faster rate, the window of opportunity to get all these dimensions right is shortening, and sales opportunities have to be focalized laser-sharp. On the advertisement front, this explains short-burst, less lengthy advertising campaigns, focused specifically on new product launches.
The window for commercial margins has hence a tendency to reduce as well. With these rapidly decreasing timelines and ever higher stakes, the success of any brand campaign depends on the effective use of market intelligence to communicate and market your products.
To stay relevant, marketers will need to leverage all the tools at their disposal. For example, marketing mix modeling evaluates the marketing campaigns’ performance across different media channels – both online and offline. The crucial insights enable marketers to strategies and allocate the appropriate budgets to generate maximum return on investment (ROI). Research intelligence will also help to support a brand’s marketing goals in the short and long term.
“To stay relevant, marketers will need to leverage all the tools at their disposal. For example, marketing mix modeling evaluates the marketing campaigns’ performance across different media channels – both online and offline”
As the tech market is relatively mature, it makes it increasingly difficult to differentiate products from those of the competition. Today, although it is still possible to promote just the features of a product, it is more effective for advertising campaigns to focus on product benefits and compelling brand experiences, to cater to “connected consumers”. There’s been an explosion in the consumption of online ‘on-demand’ viewing across Asia Pacific, creating new media moments that didn’t exist in a traditional marketing world.
Therefore, as marketers, it is essential to determine what to advertise, but it is more crucial to understand how your target customers react to communications. Our research tells us that the contribution made by different media varies by industry and brands. For example, innovative tech products benefit more from digital media advertising instead of traditional media advertising. Apart from media channels, it is also vital to ensure that the format and timing of your campaign is aligned to your objectives – whether this is to boost sales in the short term or build brand equity for the longer term.
Here’s where marketing mix modeling, through a correlational analysis of point of sales data and marketing campaign performance, can give accurate insights on synergies and ROI measurement across channels and media. By understanding exactly which of your promotions work, you have the power to simulate the outcome of sales optimize your activity for each channel.
Over the next five years we’ll also see traditional channels like radio and television open themselves up to receive marketing assets programmatically. Today, social media platforms such as Facebook make substantial money on advertising and it’s showing no signs of letting up. Instagram takes 15-second videos that look a lot like commercials. They’re part of the marketing mix and offer brands the sort of reach they only got a few times a year on television. To that end, social will just be folded into the broader marketing discipline. Gone are the days of vanilla advertising; now brands think of storytelling, branded content and digital advertising. The new-age advertising goes beyond the product and its specifications.
In today’s landscape, “connected consumers” are constantly seeking compelling experiences. To be successful, a product or service needs to be intuitive, usable and engaging while creating memorable experiences. With research intelligence, brands can leverage user insights to improve their product design, concept and prototype, to build and sustain positive customer experiences. Additionally, “connected consumers” are exposed to more advertising messages than before and have shorter attention spans. This makes it more important for brands to know exactly where, when and how to reach this group of audience.