Street-smart marketing

A large FMCG company was faced with a peculiar situation. Its toilet cleaner brand was unable to make inroads into the Gujarat market. It was a no-brainer. While this brand was accepted nationally for its ability to clean, disinfect and delicately perfume the toilet, consumers in Gujarat were more demanding.

They preferred the rigorous cleaning of acid-based cleaners for their toilets and hence opted for the local brands. The national brand was in a fix – should it launch a variant for the local market? But that would mean risking its well-established identity as a delicate yet effective cleaner.

The worst outcome could be that Gujarat’s consumers would not trust the new version and reject the brand’s variant. Launching a new brand altogether was also not an easy answer. That would mean significant investments and a larger risk. But the market was large and being present was worth its effort.

Reinventing the option

Taking a leap of faith, the brand created a new version for the Gujarat market. To reach consumers with its communication, it did not cut any corners. It also opted for a little help from technology. Television advertisements would give the best reach, but the sheer cost of advertising would put it beyond the reach of this brand. So the brand managers decided to look at options such as Amagi, a cloud-based TV ad network platform to ensure that the commercials played in the isolated market without costs going out of hand.

The ad network can get you television airtime for as little as ₹250 for ten seconds and you could be targeting your ads to only a target audience only within a city, even if it bought spots on national channels.

While it’s still too early to come up with market shares, people familiar with the brand say that it has managed to create as much noise as the national channels on television with a tenth of the advertising budget.

Welcome to the world of hyperlocal marketing! “We are delivering advertising at as local a level as possible. In traditional TV broadcast there is a huge amount of wastage. We are narrowcasting advertising in its narrowest sense,” says KA Srinivasan, co-founder, Amagi.

Experts at global management consulting major BCG (The Boston Consulting Group) argue that there is a strong case for going deeper than that in markets as diverse as India.

They feel that segmentation should move beyond the city-specific marketing initiatives to a “street-level segmentation” strategy in India which transcends the traditionally defined norms of catchment areas. (See excerpts from a recent BCG study)

In India, retailers such as Future Group or Shoppers Stop have already taken a few steps in this direction. At Shoppers Stop, the chain does not apply a single thumb rule to market to its customers in the catchment area of any given outlet. Rather it would micro-segment its audience based on consumer needs. For instance, closer to Durga Puja, a Shoppers Stop outlet in Mumbai chose to specifically address its Bengali clientele. It managed to filter down this audience using its loyalty club membership data to target only Bengalis. The return on investment was far higher than traditional marketing initiatives, says a company executive.

Small details, big impact

Deepak Praveen, COO, Green Trends Unisex Hair & Style Salon, a unit of CavinKare, says that if a certain town is primarily populated by a conservative section of society, the salons would be women-only affairs beyond the reception area. If it was a bigger town or city where customers did not mind being attended to by the opposite sex, unisex salons would work.

“Even the side of the street on which the prospective salon would be located is analysed. In fact, this is quite an important consideration in most cities, as most major roads allow only one-way traffic and the U-turns too are situated far away and a stretch of travel is often 3-4 km. Hence, we’ve moved away from kilometre-based considerations. Sometimes we have two outlets within two km due to the one-way traffic restrictions that are difficult to get around,” he says.

Narendra Malhotra, CEO of Chennai-based Oriental Cuisines says a big factor is drive time. “Most people go to restaurants that are a 7-8-minute-drive. Ten, if it’s a speciality restaurant. The distance could be anything from 2-5-10 km in this interval depending on traffic and locality.”

Other businesses such as financial service providers are also beginning to engage in street-level segmentation. They are empowering their local branch managers to create offerings based on the needs of the local clientele. But this is still in the early stages.

The day is not far behind when big brands replicate the fine attention to detail and customisation that your local grocer currently provides. That’s when marketing could truly give itself a pat on the back.

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