Tuesday, 24 December 2013 00:01
We hear often that Sri Lanka’s economy is growing at 7% plus but many institutions are talking of difficult trading conditions. The other day I was invited by a Rotary Club to address their monthly meeting and I was wondering about addressing this issue given that this particular Rotary Club had the biggest names from the corporate world present.
To analyse this issue, I got my hands on a public document of the advertising spend of the 15 players in Sri Lanka for the first half of 2013. A point to note is that this is only the above-the-line media on rack rates and if the below-the-line media is added, it can even double the spend given that point of sale material and sponsorships values do not get captured in the Sri Lanka system. The spend as at half year registers a value of Rs. 34 billion, with multinationals accounting for only quarter of the spend, which is a good sign for Sri Lanka.
South Asia driving global growth
While we see that typical Sri Lankan brands from companies like Hemas and Royal Ceramics also driving consumer behaviour change, we see nationally Sri Lanka has once again ridden the global economic fallout from the EU and lagging US as well.
A point that needs to be highlighted is that Asia as a whole is driving growth of the world and taking the lead role for the world to come out of the economic downturn. India and China are championing this task and I feel unless the stimulus packages are continued in the larger economies, there can be issues that can crop up in Asia in the future.
Some even speculate that the economy will go in for a recession globally in 2014, which is alarming to note. The reason being fiscal pressures continue to haunt countries like Japan, US and Sri Lanka and unless debt-to-GDP ratios are managed, there can be economic serious issues in the future.
Even though Sri Lanka was not directly affected by the global crisis, it is a country which is export-dependent. A good note to end the year is that for two successive months we have crossed the one billion dollar export mark and it could mean that things are getting for the better in the West.
Link to brand building
In a country like Sri Lanka where over 80% of the economy is driven by the private sector, we have to ensure that consumer demand is maintained given the inflationary pressure on the purse, post the Budget decisions on products like sprats and Bombay onions, just to name a few of the items that affect the common man. If not the 34 billion advertising spend can be under pressure to deliver sales at the retail end.
But a point to highlight is that Sri Lanka’s corporate sector has demonstrated the resiliency not only in driving business growth but also in its investment on brand building as overall quality of brand equity based advertising has increased considerably in the last two years. The overall brand values increasing as per Brand Finance is a healthy sign for private sector business growth.
Brand and its promise
I believe that brands are all about choice and how a brand competes in today’s crowded and noisy environment where Rs. 34 billion has been spent is a daunting task. The only way that I can think of for the outstanding business performance on the top 15 companies in the Rs. 34 billion expenditure is that strong brands had ‘one’ compelling idea that attract consumer’s attention and loyalty by filling an unmet or unsatisfied need.
If I take an example from outside, one of the best brands that that come to my mind is Axe – the globally acclaimed male perfume. The brand gives the opportunity to connect with real life, real fantasies and real feelings of an 18-year-old boy. The core of the brand is ‘successful seduction’ and it connects with a target that likes to talk and fantasise about it, but is not very good at it in real life.
While the targeted customer would like to be seen as self-confident and in control, they are actually insecure and quite grateful when a girl makes the first move so they don’t have to face the fear of rejection. Whether they are in Bangkok, Colombo or Boston, I feel that a typical young boy is socially and sexually diffident.
Axe works because it is a rite of passage: from feeling like boys to feeling like young men, Axe helps reinforce masculinity and makes them believe they can seduce women. In doing so Axe becomes distinctive in the eyes of the consumer and makes it personal to the brand. This is a best practice that needs to be emulated by Sri Lankan companies operating in the country.
TOM and loyalty
The second pick up for me from the 2013 half year performance is that a brand must aggressively drive top of the mind awareness and trial in the market place. The brands that achieved this and products that delivered the brand promise were able to secure a loyal consumer even though a competitor has one of the most savvy and sexy advertising campaigns.
Once again an example outside the top 15 in the half year performance is Nike. Its famous press ad headline ‘There is no finish line’ encapsulates the brand’s DNA and propels top of the mind awareness and recall.
Nike symbolises an unreachable destination in pursuit of physical fitness and wellness. The idea is both inspirational to a universal audience seeking personal betterment. Overtime, this theme has never been changed, only its expression has. Renewing and refreshing the expression to ensure continuing relevance is a challenging journey but another good practice that Sri Lankan brands must practice.
If I take a local example like Surf washing powder, the brand is all about champion mother. Yesterday’s mom believed that old fashioned mothers have dirty kids; modern parenting is all about good mothers who allow their kids to get dirty.
My ethos is that ensuring that you make the right connection with the right consumer at the right place and at the right time – critical components of keeping the idea compelling and contemporary, another best practice for Sri Lankan brands to emulate.
In the recent past new media is gaining in currency because of their potential to engage consumers. It’s all about touch points – the variety of ways in which you can connect your brand with your consumers.
In today’s environment, whether it’s via mainline media, the internet or out-of-home initiatives like point-of-sale material, you need a combination of vehicles and tactics for multi-dimensional salience and relevance.
Going back to the brand Nike, it also targets its consumers with outdoor vinyls where joggers can interact with them, in gyms where fitness freaks work out, at dance studios and in active wear sections of shopping malls.
On the other hand Surf provides a new contact point for mothers with contests for kids at schools, announcing the contests in print and TV, so that the brand experience takes place at two points – at school and at home. The contest encourages mothers and teachers to unleash the child’s potential by allowing them to explore and experience the mesmerising but messy world of colours and crayons.
Axe hosts the longest dance party in the world in some countries and the result is an event rich in emotional content, which creates a continuum of experience for the consumer. So while the old idea was to give a brand some class and exclusivity, the new way is to give it some buzz and experience – another best practice for Sri Lankan brands!
I have tried to capture the essence of the pick-ups from the half-year performance of the brands in 2013 in relation to the economy that keeps swinging like a pendulum in Sri Lanka. Though macroeconomists will not have the insights to brand building, the fact is that in a country like Sri Lanka, unless we maintain the vibrancy between macroeconomic policies and private sector brand building initiatives, we can never insulate Sri Lanka’s economy from the global economic downturns in the years to come and become a top 30 economy globally.
[The author is a double award winner in marketing and a business leader who serves on many boards as an independent director in the private and public sector. He serves the United Nations (UNOPS) in the public sector for the South Asian region.]