Abstract
In this article, attempt has been made to depict the ways the marketers compete with each other for a share of the pie – customers’ discretionary income. The competition is increasing in severity to the extent that the players drag each other to the court of law to settle dispute. Few examples of such wars are described and discussed in this article. The technological development may be one of the causes for the increased intensity of the competition or say ‘war’. The views expressed herein are completely authors own.
Introduction
“The Marketing Wars, or the Market Wars, was a universal military conflict which started in 2307 due to the heavy competition of the four multinational corporations that existed at the time. The three clans were born out of this war.
Reckitt Benckiser and Hindustan Unilever
Recently Reckitt Benckiser is locked in a head-on battle with Hindustan Unilever. In the commercial for launching its Dettol Kitchen dishwashing and kitchen cleaning gel, Reckitt Benckiser has opened a front with the giant Hindustan Unilever by clearly showing Vim dish wash. This is not the first time that these two European multinationals have drawn daggers against each other. On earlier occasions, the firms have dragged each other to the court and advertising watchdog Advertising Standards Council of India (ASCI).
Dettol has some 53% of the Rs300-cr hand wash category while Vim has been dominating the dishwashing space for close to 100 years. Reckitt Benckiser has taken its battle over germ-protection with HUL to the kitchen with the launch of Dettol Kitchen. Apart from Vim, Dettol Kitchen will compete with Henkel-Jyothy’s Pril and Exo. The size of Indian diswashing market that includes bars, powders and liquids stand at Rs 2000 cr. and the size of the liquid diswash segment, which is growing at about 40% a year, is Rs 300 cr.
Very recently, (less than fortnight) GlaxosmithKline Consumer Healthcare launched its global brand of toothpaste Parodontax targeting the customers with gum trouble – bleeding gums to be specific. This was the segment dominated by Colgate-Palmolive. As was expected, Colgate-Palmolive – the oral care market leader – reacted quickly and forcefully. A week later Colgate-Palmolive started its own campaign claiming its product – Colgate Total Pro Gum – as the best suited for bleeding gums.
The question is, do these kind of high-voltage ad campaigns work? “The cola wars of the 1990s did not help either Coca-Cola or Pepsi. What they did was create excitement in the category,” said Santosh Desai, CEO of Future Brands. “While different brands would have different reasons to come up with competitive advertising, what it does is create either new categories as in the case of specialist oralcare or smartphones, or create excitement in existing ones as in the case of biscuits.”
One would have notice that the advertisements for newer categories like smartphones have gone up and are also persuasive. Apple has come out with an ad blitz on “Zeros” – zero down payment, zero EMI schemes for its iPhone 5. The smartphone category leader Samsung, not to be left behind, swung in to action by launching a big-bang print ad campaign that announced the revival of its EMI schemes for six premium Galaxy phones. Sony, another smartphone player, has roped in Katrina Kaif for two years to promote its Xperia smartphones and decided to triple its marketing budget for smartphones to Rs 300 crore for next fiscal. Sam Balsara, chairman and MD of Madison, the company that buys media for tobacco-to-biscuits major ITC and telecom services provider Bharti Airtel, said there is increasing realisation among companies that they can’t take growth for granted in a cautious economic environment and with more brands entering the market. “We see an escalation of ad spends, especially among consumer companies, this year,” he said.
Few months earlier, UK biscuits maker McVities started claiming in their ads that their biscuit is the ‘only biscuit without maida’. This was their way of taking a swipe at the other biscuit brands. “The commercial elevates the digestive category compared to regular biscuits by honing onto a relevant category truth. The objective is to tell consumers why McVitie’s is better,” said Jayant Kapre, president, United Biscuits. “In the heat and dust of the marketplace, you do have skirmishes now and then,” said Sameer Satpathy, marketing head of Marico.
It is always a challenge to a new entrant to create a mark. The new player can attract the attention of the customers either by keeping the price at penetration level or by differentiating the product in one way or the other. Keeping the price low is a challenging proposition for many reasons and claiming superiority over the others is comparatively less demanding, provided that the superiority fact can be established in the minds of the customers. “When there is a new entrant, the best way to gain market share from the leader is to claim superiority. If your claim is based on facts, then it is legitimate because consumers would like to know more about the products they are using,” said Mr Sharma, chairman and chief executive officer of ad agency Leo Burnett, who is also the chairman of the Advertising Standards Council of India (ASCI), the advertising watchdog.
In this article, attempt has been made to depict the ways the marketers compete with each other for a share of the pie – customers’ discretionary income. The competition is increasing in severity to the extent that the players drag each other to the court of law to settle dispute. Few examples of such wars are described and discussed in this article. The technological development may be one of the causes for the increased intensity of the competition or say ‘war’. The views expressed herein are completely authors own.
Introduction
“The Marketing Wars, or the Market Wars, was a universal military conflict which started in 2307 due to the heavy competition of the four multinational corporations that existed at the time. The three clans were born out of this war.
Each of the multinational corporations had mercenary troops under their central command. Their objective was to stabilize and in some cases increase, their organization’s sphere of influence. Such structuring has proven adverse for the companies in some respects. The arming and training of local militia, ex-soldiers and small time gang members has opened a power vacuum in the streets. Well-organized and powerful members of the “underworld” have developed independent and efficient clans, with their own hierarchy, supply chain, justice and code of honour. Three clans have crystallized as the strongest among them…”
So reads a story – “The Marketing Wars” – appearing on internet.
If you think the above is the work of a fiction, think again! None of us of present era may live to find out what really happens in 2307. But we can surmise the scenario from the current events. Present day marketers wage war bitterly so much so that the conventional marketing is turning bloody enough to be called ‘Red Ocean’. The battle for a share of customers’ pocket is no less severe less than the conventional war – except that explicitly no one is killed. In fact, as is well known, much of marketing techniques are drawn from military science and no wonder then the marketers wage war against each other in one way or the other.
So reads a story – “The Marketing Wars” – appearing on internet.
If you think the above is the work of a fiction, think again! None of us of present era may live to find out what really happens in 2307. But we can surmise the scenario from the current events. Present day marketers wage war bitterly so much so that the conventional marketing is turning bloody enough to be called ‘Red Ocean’. The battle for a share of customers’ pocket is no less severe less than the conventional war – except that explicitly no one is killed. In fact, as is well known, much of marketing techniques are drawn from military science and no wonder then the marketers wage war against each other in one way or the other.
Advertising Wars
Reckitt Benckiser and Hindustan Unilever
Recently Reckitt Benckiser is locked in a head-on battle with Hindustan Unilever. In the commercial for launching its Dettol Kitchen dishwashing and kitchen cleaning gel, Reckitt Benckiser has opened a front with the giant Hindustan Unilever by clearly showing Vim dish wash. This is not the first time that these two European multinationals have drawn daggers against each other. On earlier occasions, the firms have dragged each other to the court and advertising watchdog Advertising Standards Council of India (ASCI).
Dettol has some 53% of the Rs300-cr hand wash category while Vim has been dominating the dishwashing space for close to 100 years. Reckitt Benckiser has taken its battle over germ-protection with HUL to the kitchen with the launch of Dettol Kitchen. Apart from Vim, Dettol Kitchen will compete with Henkel-Jyothy’s Pril and Exo. The size of Indian diswashing market that includes bars, powders and liquids stand at Rs 2000 cr. and the size of the liquid diswash segment, which is growing at about 40% a year, is Rs 300 cr.
Strategically speaking, Dettol Kitchen ads were released on a Friday and if HUL approaches the court for stay order on the ad, it has to be on Monday at the earliest. In the meantime the ad would have created considerable impact over the weekend.
“Such ads gives a very strong message psychologically that it’s not just another product and they can compete with the market leader. While HUL almost has a monopoly in the segment, there could be more action now in an otherwise dull segment,” Nitin Mathur, consumer research analyst at Espirito Santo Securities, said.
ASCI chairman Arvind Sharma, who is also the chairman & CEO of Leo Burnett in Indian subcontinent, said that featuring a rival brand in a campaign alone does not break advertising codes. “In general, the consumer complaints council code allows ads to show a rival brand as long as the claims made in the ad are fact-based,” said Sharma who is also the president of Advertising Agencies Association of India.
Dettol Kitchen is positioned by Reckitt Benckiser as a ‘complete kitchen cleaner’, for use as a dish-washing gel and cleaning other kitchen surfaces like sinks and slabs. The 80-year-old Dettol brand, launched first as an antiseptic liquid in 1933, has subsequently been launched across different categories including soap, plaster, handwash, shaving cream, hand sanitiser, and now kitchen cleaner. . India is only the second country after Korea to roll out Dettol Kitchen. Dettol has some 53% of the 300-crore handwash category, followed by Lifebuoy at a share of about 30%. But in soap, Lifebuoy has close to14% share, against Dettol’s 8.2% market share. HUL’s Lifebuoy and Dettol have been rivals for close to three decades.
It seems as though Reckitt Benckiser is giving HUL a taste of its own medicine. Not very long ago (around two years) HUL took a dig at its rival Procter & Gamble when the ads for Rin detergent clearly showed the pictures of Tide in its ad. P&G immediately moved the court (within a day of the ad going on air), and the ad was stopped within days.
But not all the ad wars end up in a court battle. The customer has the final say. He decides whether to buy the advertised product or not.
GlaxosmithKline and Colgate-Palmolive
“Such ads gives a very strong message psychologically that it’s not just another product and they can compete with the market leader. While HUL almost has a monopoly in the segment, there could be more action now in an otherwise dull segment,” Nitin Mathur, consumer research analyst at Espirito Santo Securities, said.
ASCI chairman Arvind Sharma, who is also the chairman & CEO of Leo Burnett in Indian subcontinent, said that featuring a rival brand in a campaign alone does not break advertising codes. “In general, the consumer complaints council code allows ads to show a rival brand as long as the claims made in the ad are fact-based,” said Sharma who is also the president of Advertising Agencies Association of India.
Dettol Kitchen is positioned by Reckitt Benckiser as a ‘complete kitchen cleaner’, for use as a dish-washing gel and cleaning other kitchen surfaces like sinks and slabs. The 80-year-old Dettol brand, launched first as an antiseptic liquid in 1933, has subsequently been launched across different categories including soap, plaster, handwash, shaving cream, hand sanitiser, and now kitchen cleaner. . India is only the second country after Korea to roll out Dettol Kitchen. Dettol has some 53% of the 300-crore handwash category, followed by Lifebuoy at a share of about 30%. But in soap, Lifebuoy has close to14% share, against Dettol’s 8.2% market share. HUL’s Lifebuoy and Dettol have been rivals for close to three decades.
It seems as though Reckitt Benckiser is giving HUL a taste of its own medicine. Not very long ago (around two years) HUL took a dig at its rival Procter & Gamble when the ads for Rin detergent clearly showed the pictures of Tide in its ad. P&G immediately moved the court (within a day of the ad going on air), and the ad was stopped within days.
But not all the ad wars end up in a court battle. The customer has the final say. He decides whether to buy the advertised product or not.
GlaxosmithKline and Colgate-Palmolive
Very recently, (less than fortnight) GlaxosmithKline Consumer Healthcare launched its global brand of toothpaste Parodontax targeting the customers with gum trouble – bleeding gums to be specific. This was the segment dominated by Colgate-Palmolive. As was expected, Colgate-Palmolive – the oral care market leader – reacted quickly and forcefully. A week later Colgate-Palmolive started its own campaign claiming its product – Colgate Total Pro Gum – as the best suited for bleeding gums.
The question is, do these kind of high-voltage ad campaigns work? “The cola wars of the 1990s did not help either Coca-Cola or Pepsi. What they did was create excitement in the category,” said Santosh Desai, CEO of Future Brands. “While different brands would have different reasons to come up with competitive advertising, what it does is create either new categories as in the case of specialist oralcare or smartphones, or create excitement in existing ones as in the case of biscuits.”
One would have notice that the advertisements for newer categories like smartphones have gone up and are also persuasive. Apple has come out with an ad blitz on “Zeros” – zero down payment, zero EMI schemes for its iPhone 5. The smartphone category leader Samsung, not to be left behind, swung in to action by launching a big-bang print ad campaign that announced the revival of its EMI schemes for six premium Galaxy phones. Sony, another smartphone player, has roped in Katrina Kaif for two years to promote its Xperia smartphones and decided to triple its marketing budget for smartphones to Rs 300 crore for next fiscal. Sam Balsara, chairman and MD of Madison, the company that buys media for tobacco-to-biscuits major ITC and telecom services provider Bharti Airtel, said there is increasing realisation among companies that they can’t take growth for granted in a cautious economic environment and with more brands entering the market. “We see an escalation of ad spends, especially among consumer companies, this year,” he said.
Few months earlier, UK biscuits maker McVities started claiming in their ads that their biscuit is the ‘only biscuit without maida’. This was their way of taking a swipe at the other biscuit brands. “The commercial elevates the digestive category compared to regular biscuits by honing onto a relevant category truth. The objective is to tell consumers why McVitie’s is better,” said Jayant Kapre, president, United Biscuits. “In the heat and dust of the marketplace, you do have skirmishes now and then,” said Sameer Satpathy, marketing head of Marico.
It is always a challenge to a new entrant to create a mark. The new player can attract the attention of the customers either by keeping the price at penetration level or by differentiating the product in one way or the other. Keeping the price low is a challenging proposition for many reasons and claiming superiority over the others is comparatively less demanding, provided that the superiority fact can be established in the minds of the customers. “When there is a new entrant, the best way to gain market share from the leader is to claim superiority. If your claim is based on facts, then it is legitimate because consumers would like to know more about the products they are using,” said Mr Sharma, chairman and chief executive officer of ad agency Leo Burnett, who is also the chairman of the Advertising Standards Council of India (ASCI), the advertising watchdog.
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