The war of 'places'

Mankind has been witnessing innumerable wars with the hefty loss of life and property and most of them were fought for only one reason, "place". The acquisitiveness of rulers was the major reason for the every battle fought and this reason continues till date. In this modern era of self-driven cars, mankind is again standing in the battleground, but this time, it is not being fought with bloodshed but with moneyshed.

 There was a time when people used to search offline and buy offline, then the internet came and helped people to search online and buy offline. Then came the e-commerce which marked the beginning of people searching offline and buying online. It all started with books which developed in stages to apparels to electronics to furniture to the grocery to medicines to food. Nowadays, you can virtually get anything and everything with just a few touches on your smartphone, your virtual wallet and, of course, the internet.

There is a continuous war between the offline space and online space in every area, whether the high investment categories of jewelry, electronics, gadgets and mobile phones to medium investment categories of apparels and footwears to low investment categories of grocery and foods.

Each side is fighting this war with their own weapons and armors. First of these weapons is the mode of payment. While offline has the tried and tested modes of payment of cash or cards, online has the preferred mode of payment as the virtual wallet. Each of these payment options has some advantages over the other and therefore, each side is also utilizing each other's weapons to neutralize the power of each other. While online has always used card payment, offline has started keeping handy the virtual wallet payment option.

The second weapon on which online rely is discounting and offline, on the other hand, has an armor of physicality against the online's weapon. There is a continuous see-saw going on between both spaces, one may win the small battle but the war is still going on. Both the sides realized the state of indecisiveness when each side's strategies and weapons are countered by the other side's counter-attack and armory.
But the course of this war is changing with the commissioning of war spies. The offline is going online and vice versa and in this way, spies are being deployed on each side.

The examples of offline present online are Aditya Birla (trendin.com & abof.com), future group (http://shop.bigbazaardirect.com), on the other hand, online firms like ferns & petals, lenskart, amazon and many more, are entering into the race of omnipresence by establishing offline centers.

It is said, someone is always benefited from anything that happens anywhere in the world and here also, there is someone who is the beneficiary of this ongoing war. You must have read the famous childhood story of the fight between two cats and a monkey. While two cats kept on fighting on a piece of cake, it was the monkey who took advantage and enjoyed to the fullest.

Today, online is although making huge revenues and increased its turnover manifolds but is incurring incomparable losses due to heavy discounting. If we take the case of India, the combined losses of the terrific trio which includes Flipkart, Amazon, and Snapdeal in India is Rs.5052 Crores only in FY 2015-2016.
Due to the fear of losing customers, offline panicked and started giving more discounts than it used to offer and, in turn, reduced its profitability. The only entity which is getting benefit out of this is the customer. You are smart enough to figure out who are the cats here and who is the monkey.

The major question which now arises is, how and when will this war end and who will win this war?

Many experts say that the ability of online to offer alluring discounts will end soon and by that time major offline will be present online but most online will not be present offline and those which will be present, to a minuscule level.

But the deciding factor in this war is the power of followers each side has. The followers are the customers which are loyal to the spaces.

There are two groups of customers, for one group, look and feel of the things which they are buying matters more than their comfort but for the second group, comfort and choice matter more than the ability to look and feel. This has changed the buying habits of the second group of customers and they follow online whereas first follow offline.

The second group of customers is strengthening because the majority of urbanized generation Y and Z and a part of urban generation X are following online. But semi-urbanized and rural generation X, Y and Z which forms the majority of the world population still rely on offline.

In this war of places, online is giving a good fight to the offline, but the latter is firmly holding its grounds on the basis of its large followers and unparalleled armor. Online has deployed deadly weapons, backed by its followers, but it will not be able to sustain for a long period of time in this war unless and until it deploys more spies and increase the return per customer.

Each side should realize that they are being made cat and the monkey is clapping in the state of euphoria because he is getting everything at huge discounts. Moreover, he is not an ally with any cat, just inclined towards the discounts.

The Four faces of FMCG

What is FMCG

FMCG is the another name for the fast moving consumer goods, which provides the basic products for health, hygiene and grooming for the mankind. FMCG is the fourth largest industry in the Indian economy, contributing USD 47.3 billion of revenues to the economy and is expected to contribute USD 49 billion by the year 2016. FMCG is the last industry to be affected by the economic slowdown because people will still brush their teeth, take a bath, have cereals and toast in their breakfast irrespective of the economic conditions,

FMCG industry has three major segments:

1. Food & Beverages contributing 18% to the industry
2. Health Care contributing 32% to the industry
3. Household & Personal Care contributing 50% to the industry

These three major segments are divided into eight sub-categories, whose contributions to the total industry is described in the chart below:

These aforementioned eight sub-categories which make FMCG such an important industry today comes either of the four faces of FMCG.

So what are these four faces?

1: The Evil face:

This is the face of FMCG behind which companies creates products and persuade customers to desire these products.
This is the face which enables companies to force their customers to shell out some extra bucks out of their pockets.
Customers don't actually need these products but companies present them in front of customers as the much better than the previous products. This proposition allures customers and is happy to spend more.

Glassless Deos, Men's face wash, toothbrush with charcoal bristles, are just a few examples of evil face of FMCG.


2: Noble Face:

Just opposite to this face is the noble face of FMCG which does all the corporate social responsibility activities and wears a makeup of the social cause.
This helps FMCG companies to evolve as socially responsible companies and establish a good image in the eyes of their customers. It is because of this face only that companies are able to win soft corners in the hearts of their customers.

HUL's hath muh bum, project sunlight, Dettol's association with Swachh Bharat Abhiyan, P&G Shiksha and many more projects are examples of the noble face of FMCG.


3: Healthy face:

The face of FMCG which is established by providing a healthy proposition to the customers derived from herbal or ayurvedic or organic base.
It is always said, "Health is the real wealth", that holds true for the companies operating behind the healthy face of FMCG.
Companies under this face play the USP card as health advantage with no harmful effects of using their products, and customers willingly pay whatever amount is asked from companies.

These companies operate under the model of low volumes and high revenues and some of the examples of companies which represent healthy face are Kama Ayurvedics, Forest Essentials, Organic India, Keya Seth, Arish Ayurvedic, Parampara.


4 Religious face:

The Indian FMCG industry was operating cheerfully behind its three faces Evil, Noble and Healthy, but then came the religious face, which became the vexation for the other three faces.
This face of FMCG is still in a nascent phase and since its inception, it has become the centre of attraction for customers, channel partners and companies of other faces.
Indians are listed under most religious people alive on the planet, who don't follow religions but blindly go after the people who claims to be the messengers of religions.

The first company which utilised this opportunity of prodigious followers base was "Patanjali Ayurved", founded under the name of Baba Ramdev AKA The yoga guru.
This company operates by providing products under all the three major segments of FMCG, with lesser maximum retail price than the products of companies of the evil face.

While all the major FMCG companies, including the largest FMCG company of India HUL, operates only in one or maximum two segments of FMCG and that too with the limited products, but Patanjali Ayurved is operating in all the three segments with all possible products in every segment.

P&G: Household & Personal Care
Coca-Cola: Beverages only
Kellogg's: Foods only (Cereals)
Nestle: Foods & Beverages
L'oreal: Personal Care

Patanjali Ayurved: Foods & Beverages, Household & Personal Care and Health Care
It is now being said, if all the products of all the companies are combined together, product catalogue of Patanjali will contrive. Patanjali has products in over 75 categories and over 800 SKUs.
After the success of Patanjali Ayurved, every "baba" and "Sadhvi" in India, who have their own base of followers are now jumping in FMCG industry with the support of religious sentiments of Indians.

A company known as "Shri Shri Ayurveda" which was founded by H.H. Shri Shri Ravishankar, has now launched several products under foods & beverages and personal care categories although it started merely as a health care product manufacturing company in 2003.

In the recent past, a company known as "MSG all trading international" was founded by the "Dera Sacha Sauda" chief Saint Gurmeet Ram Rahim Singh Ji Insan, under which 151 products were launched.

While the religious face will evolve with time, other faces will dwindle and it will be fascinating to see the revamped four faces of FMCG, till then fasten your seat belts and be ready for a roller coaster ride because a lot has to happen in this crazy industry.

The Human Brand Relationship

It is always said, "A Man is a social animal", who relish meeting others of the same kind, making friends and establishing long term relations. In our lifetime, we meet thousands of people, remember few hundreds, but develops a long-term friendship and relations with only handpicked out of those hundreds. This social behavior and ability to establish long-term relations are not only visible in our personal life but in every decision throughout our life. This is the reason why we prefer one brand over other despite both giving the same benefits because we make a relation with them.

Since our infanthood days, we developed the relation of brother/sister, niece/nephew with our relatives based on our parents' relations with their friends and relatives. We got our uncle & aunt because our parents chose to develop long term relations with them from their hundreds of college friends. In a similar manner, we developed a relation with "Jhonson & Jhonson" because our parents chose J&J over other brands and established a relation of trust for us. We looked upon "Nestle" with trust when we were served Cerelac three times a day and were not ready to accept anything else if ever tried by our parents.

Till the time we went to kindergarten, relations with people and brands were gifted by our parents and we automatically developed long term relations with them, but as we began going school, met new kids, developed an ability to pick and choose both people and brands.

We started demanding "Disney" characters to play with, "funskool" toys and "Hotwheels" cars to feel proud of our game collection. We developed a relation with our favorite "Natraj" pencil, sharpener, and eraser and were excited for the art lecture to use the new pack of "Camlin" crayons. We deliberately rough handled our old school shoes to buy a new pair of "action" school shoes, our first "pilot" pen when we entered 6th standard.

As we reached adolescence, we were already having the bunch of close friends and certain brands with which, relations will be a lifetime, but also had faced many heartbreaks, loss of trust both by people and brands. Sometimes we changed our priorities for people, and switched to other brands, and sometimes people change theirs and brands left us as they discontinued or lost their identities.

We realized the importance of relations with people and brands when our best friend and "Old monk" gave us his shoulder to exude our tears on our first breakup. We became responsible when our parents gifted a "Raymond" suit for our first job interview and we felt accomplished with the first salary credit notification from "HDFC" bank in our "Nexus" phone.

When we will become parents, we will trust the same brands which our parents gifted us when we were infants, and this led to generational relations with brands, which is best for any brand. In today's world of brand flood and communication tsunami, it is difficult for any brand to establish long term relations with consumers and in this scenario, if any brand is abe to establish relations with more than one generation of its consumers, it becomes immortal.

Human relations with brands changed according to human life phases from infanthood to adolescence to parenthood. At inception, we received relations from our parents, then learned to develop relations but were not able to understand their importance and with time realized the grandness of relations and established life-long relations.

"A man is known by the people with which he spends time", and a man is known by the brands he carries. This ability to reflect the personality of a man in Brand makes the idea of celebrity endorsement so successful. Brands utilize charming personalities of Celebrities to develop brand personalities which become the most important reason for a common man to carry that brand. We want to add that personality element offered by the brand to our personality and as a result, choose different brands which complement each other and develop our overall personality. Here brand act as the medium for human-human relation.

In return, brands also get something from our personality when we carry them. Brands built their personality further with the help of its users when a user carries it with other brands. Here human act as the medium for Brand-Brand relation and one brand utilizes personality of another brand to further built its own.

Just after parking your range rover endeavor, you received an important call on your apple i phone 6S, and suddenly looked at your omega and realized you are late for the meeting, rushed to the meeting room and at the end you happily took out parker from your Van Heusen suit and signed the contract. Here, you carry brands like apple, omega, parker, Van Heusen and range rover to add their personality elements to your personality. At the same time, all brands complemented each other and utilizes each other's personalities to develop their own personalities.

Man builds relations with bands and brands builds relations with other brands and thus, the chain of human brand relationship keeps on the building.