Posts Tagged ‘consumer’
AdStock GRPs
Posted on: June 30, 2012
AdStock is a simple mathematical model of how advertising builds and decays. It is invented by Simon Broadbent as he studied Milward Brown’s ad awareness data.
AdStock helps to:
- Optimize your advertisement scheduling
- Used in marketing-mix modelling to come up with advertising ROIs, etc.
- Helps you decide when to be off-air and when to be on-air
- Helps you understand the advertising decay behaviour
How advertising builds and decays?
Let us take awareness as a parameter to understand the concept of AdStock. As a consumer watches an advertisement for the first time, let us assume that consumer gains certain awareness of the brand, category, etc. Now, when the same consumer watches the advertisement for the second time, the advertisement builds on the awareness. The advertisement hopefully will strengthen the awareness, recall, preferences, etc. So, advertising builds on itself and that is why we call it as a campaign building.
Similar to the way it builds, an advertisement also decays in similar fashion. If a consumer has seen an advertisement A1 10 times in a week and the same consumer has seen an advertisement A2 only once in a week, then the way the consumer forgets the advertisements is very different. The decay rate of an advertisement depends on various parameters such as: the strength of the advertisement itself, media plan, media vehicles chosen, category involvement of the consumer, etc.
The normal GRP data doesn’t take into account the build and decay rates. So it doesn’t take into account the residual effect of advertising, though a company doesn’t advertise in a specific period. AdStock is nothing but the GRP data taking into account of the build and decay of advertising, which is more sensible in marketing applications.
Optimize your advertisement scheduling
As explained, the AdStock GRPs are the GRPs weighted for the advertising build and decay rates.
Let us look at case to optimize the scheduling strategy for an advertisement. For this case, the advertisement is assumed to have a half-life of 6 weeks (hypothetical). This will come out for a decay rate of 12.24% as shown in the table below.
We have four options of scheduling, each using roughly the same (1200-1500 GRPs) amount of GRPs. Once we translate these raw GRPs into AdStock GRPs, it will help us decide which scheduling strategy is the most optimum as explained below.
The AdStock GRPs are adjusted based on the decay rate. For example, the number 469 in Wk 2 is arrived by: (250 of Wk2) plus (250*87.8) (decayed GRPs of Week 1) = 469.
Similarly, 662 in Week 3 is arrived by: (250 of Wk 3) + (250*87.8) (decay of Wk 2) +(250*77.0)(decay of Wk 1)= 469
From the above, it is clear that Option 1 gives the maximum ROI. The other parameter important for selection of an option is the off-air time. Which of the above options gives me the maximum off-air time (when you don’t air the advertisement)?
From the above table, it is clear that Option 1 gives the maximum off-air time for the advertisement by still maintaining more than 500 GRPs. In the above example, 500 GRPs is considered as the threshold and if it goes below, then the advertisement has to come on-air.
To sum it up, AdStock helps marketers understand ‘When to advertise‘? AdStock is commonly used in scheduling, marketing-mix modelling, etc.
Any comments on this regard are most welcome.
Thank you.
Touch point strategy
Posted on: September 3, 2011
Segmenting consumers and understanding their behavior helps us understand the different customer interactions and touch points available for each of these consumer segments. Understanding the brand personality and the moods the brand can leverage will provide the advantage to communicate the values and be present at relevant touch points.
With the media clutter the consumers are exposed to, marketers and media professionals should continuously innovate on new touch points, optimize every rupee spent, and come up with the best consumer touch point strategy
CONSUMER SEGMENTS
Star India Pvt. Ltd has picked up the television broadcast rights for Shah Rukh Khan super-hero movie Ra.One, which is currently set for an October release. The company didn’t say how much it paid for the movie rights to one of the year’s most highly anticipated films, but it reflects the aggression with which TV is pursuing Bollywood. With brand new films guaranteed to attract viewers, broadcasters are spending as much as 300 crore rupees a year to purchase TV rights of films, according to some media buyers.
Star also bought the rights for films currently running in theatres – Stanley ka Dabba and Dum Maaro Dum – ensuring that those who didn’t watch these movies in the theatre can catch the movies on TV soon. The gap between the theatrical release and TV premiere is shrinking and with it the window of opportunity for the cinema halls to make money from a film. The whole dynamics of the fastest FMCG (cinema) is changing very fast.
In villages of rural AP, it is not so common to see theatres shutting down as the villagers prefer to watch TV at home than in the theatres. With the increasing penetration of DTH in rural India and with better infrastructure (electricity) the local theatres are facing tough competition from the TV channels. Most people in the villages too get glued to these new movie premieres on TV.
Some of the latest blockbusters shown on the DTH platform attracted as many as 100,000 people on a pay-per-view basis, many of them from smaller towns and cities. Instead of spending money in the theatres, multiple people can watch the movie for 50 rupees at home.
From the film production houses point of view, theatrical releases are still the biggest source of revenues which is the reason why producers should time the release of their films in the theatres and on TV very carefully. The FICCI-KPMG 2011 Entertainment and Media Report points out that with income from other platforms going up, the share of theatres is declining. Currently the share has declined from 79% in 2008 to 76% in 2009 and the report says that it is set to decline to 70% by 2015.
It is to be seen how these dynamics play out in the future which has key implications for marketers and businesses.
India is one of the most challenging markets in the world which fooled big marketers and companies across the world. We have over 1500 Gods segmented into 350 broad categories, and we have a God for every single day of the week. There are 9.5 lakh pan shops, 638,667 number of villages, 612 districts, and 28 states in India. This is the country where you see a pan shop and Haagen Daz together, and a bullock cart and a Mercedes in the traffic jams. Indian market is very challenging and it really fascinates me as a marketer.A very large part of Indian population still lives in villages defining the Rural India.
Rural India is very important for many companies and there is tremendous increase in investments and strategies surrounding the rural markets. Rural India Market buys:
- 45% of all soft drinks
- 50% of motorcycles, TVs, cigarettes, washing soap, fans, blades, and a lot others.
Rural Market Opportunities
Few of the companies that are going bullish in the rural markets:
- HUL with its Project Shakti has already has a reach of 1.7 lakh villages, and aspires to reach 5 lakh villages by 2020.
- Indian Tobacco Company (ITC) has a lot of penetration in the rural markets and the eChoupals are a big hit in the rural market.
- Airtel is planning to reach around 2 lakh villages.
- Marico with its most famous brand Parachute has a reach of 1 lakh villages.
- Pepsi and Coke, the Cola giants, have a reach of 70,000 villages.
- Dabur, known for its Lal Dant Manjan and Hajmola, has a reach of 60,000 villages.
- Colgate with its Operation Jagruthi has a reach of over 60,000 villages.
- Mahindra & Mahindra sells most of its SUVs in the rural market.
Mahindra Shubhlabh is India’s largest exporter of fresh produce. Mahindra Shubhlabh engages with farmers in the production of export quality grapes, pomegranates, and apples aimed at delivering to domestic and international markets. It has a huge R&D facility in Pune to research on various modern seeds and saplings.
- Nokia 1100 with its torch is a very big hit in the rural market. It is a perfect example of understanding the needs of the consumer. Nokia realized the need for a torch in the mobile for the rural people as they walk in the dark streets and fields of the village. Nokia is set to release some low cost phones to tap more from the tier-3 and tier-4 markets.
There are other companies like Godrej, ParleG, Asian Paints, Yes Bank, Royal Enfield, ITC and Revlon.
Marketing Challenge
Delivering to the rural markets is a real challenge to many companies. In fact, the whole dynamics of these markets are so different that you need to look at a different product mix containing the 4A’s instead of the traditional 4P’s of marketing:
Acceptability – Build what the consumer wants
Affordability - Make an affordable product
Availability - Distribution plays a key role in the rural markets
Awareness - Don’t promote the brand, demonstrate the product.
Top Media in Rural Markets
Dainik group is the leading newspaper in the rural markets. In the realm of television, we have the following in the descending order of penetration in the rural markets.
- Doordarshan has a reach of 97% of the rural markets in India.
- Zee Cinema which carries with the image of movies being the favourites of rural people.
- B4u movies
- MTV
- Discovery Hindi
One of the key trends in the rural markets is people changing very quickly from cable to satellite TV. This is because of the hassle-free dish connection of the satellite TV. Most of the dish TV companies like Tata Sky, BIG TV, and Airtel are selling good in the rural markets too. Similarly, Revlon has come up with a lipstick for the rural markets and it is doing very good as against Lakme. This shows that there is huge potential in these markets and it is interesting to see how these trends will transform the lives of the rural people and in turn impact the Indian markets.
This blog is following a debate with my colleagues over how you distinguish between a perceptual benefit and a real benefit.
Every product has some real benefits and perceptual benefits. For example, in the case of a sports bike, the real benefit could be having a speedy ride on the roads and the perceptual benefit could be having a macho image or getting a girl. The perceptual benefit depends from person to person based on his perception of the brand image. With the same sports bike, you may have some other perception altogether.
Now I come to the point which created the debate. Let us take the example of an aromatic soap. There is a complete consensus that the real benefit of a soap is to clean the skin. Now coming to the aroma of the soap, there is a difference in opinion on whether it is a perceptual benefit or a real benefit. My take on it is as follows:
There are two cases of usage of perceptual benefit.
Perceptual benefit to mean customer’s association:
If you think of the perceptual benefit from the customer’s association perspective, the perceptual benefit can be perceived in different ways. My perceptual benefit of possessing an iPod may be different from that of the other. The simplest way to categorize is ask if the product management induced the benefit which is true in the case of an aroma for a soap. The aroma is deliberately given to the soap which is a real benefit. In the case of the sports bike, the perceptual benefit of getting a girl is not productised, rather it is perceived by the consumer based on the brand image. In this case the macho image is a perceptual benefit because you are not doing anything in your product management to give a girl along with every bike.
Perceptional benefit to mean intangible benefit:
If we use the word perception in ‘perceptual need’ to mean intangibility then aroma of a soap is a perceptual need.
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