India: Brand overload

Quote from WSJ article:

"India's store shelves groan under the weight of consumer brands. About 900 new food and beverage brands alone have been launched there in the past two years. Yet while shoppers enjoy ever more choice, it is getting harder for companies such as Procter & Gamble and Hindustan Unilever to preserve profit margins."

Consumer Products Goods sector is going to be a very competitive market in this decade to create large values for investors. The winners will be ones who are Unique versus Distinctive. See my previous blog on the subject here, or win on price points.

Power's Impact on Behavior

For CPG companies such as P&G and Unilever, whose shopper is mostly a woman, the concept of empowerment to purchase for the household is an important topic.  Also, retailers large and small look at the buying "power" of the geo- and demo- graphics to price in their locale, for example.  So, what is the impact of "power" on the individual.

Here are a few strategic insights from the work of Adam Galinsky, Kellogg School of Management at Northwestern University (details here) and Joris Lammers, Tilburg University (details here) in their work "Illegitimacy Moderates the Effects of Power on Approach", download here.

"“Power activates a person’s behavioral approach system and underlies our motivation to act, while powerlessness activates our behavioral inhibition system to restrict action and risk-taking,” said Galinsky.

“But, in illegitimate power scenarios, the powerless are more likely to act without direction in an attempt to change the situation, and the powerful may inhibit their actions for fear of losing their undeserved seat at the top.”"

Another study from them published in the Psychological Science here, "Power Increases Hypocrisy, Moralizing in Reasoning, Immorality in Behavior" sheds light on a few interesting conclusions.  Following are excerpts from a review in the Economist:

"...powerful people who have been caught out often show little sign of contrition. It is not just that they abuse the system; they also seem to feel entitled to abuse it."

Dr. Lammers and Dr. Galinsky introduce a new term "hypercrisy":

"...an intriguing characteristic emerged among participants in high-power states who felt they did not deserve their elevated positions. These people showed a similar tendency to that found in low-power individuals—to be harsh on themselves and less harsh on others—but the effect was considerably more dramatic. They felt that others warranted a lenient 6.0 on the morality scale when stealing a bike but assigned a highly immoral 3.9 if they took it themselves."

The research linked above and the Economist's conclusion paint a bleak picture though:

"Perhaps the lesson, then, is that corruption and hypocrisy are the price that societies pay for being led by alpha males (and, in some cases, alpha females). The alternative, though cleaner, is leadership by wimps."

Media Shows Its Ignorance on Innovation

Good friend Franz Dill shares thoughts on a ABC article on innovation here.

The "New" Old Market - Muslim Consumer

Having developed the focus on the Muslim Consumer at P&G at the highest level, it is interesting to see mainstream marketing and communication companies exploring new revenue streams in this consumer sector.  Astute P&G colleague Amer Almomen passes along WPP's thinking around the 1.6 billion consumer awaiting marketing messages, see article here.

Overall, the article shows the early approach to be exploratory while unburdened from cliches about Islam.  Yet, categorization (essential for agencies to develop processes) is nascent - to "touch" the "life" of the "boss" through messaging in the Islamic environment requires minds that have grown up in the environment, or development of large knowledge bases on behaviors created through engagement and intelligence extracted from them.  One such organization is Maktoob Research, recently acquired by Yahoo, see details here.

The Muslim Consumer's diversity from ethnic to economic to geographic is an exciting realm to delve into!  Good luck to all entrants!

Machines Providing Real-Time Consumer Insights

"...Unilever, an Anglo-Dutch consumer-goods giant, is using expression-analysis software to pinpoint how testers react to foods. Procter & Gamble, an American competitor, is using similar technology to decipher the expressions of focus groups viewing its advertisements."

States the article "Machines that can see" here in The Economist.  Similarly, the ability of sensors driven understanding of environments can enable in-context communication with a perspective consumer.  Further, remembering the consumer and the context allows for touching them in a non-disruptive fashion where the flow of information or marketing is "continued".  For example, as the article states:

"Digital billboards—the large TV screens that display advertisements in public places—already take into account the weather (touting cold drinks when it is hot) and the time of day (promoting wine in the evening). NICTA, a media laboratory funded by the Australian government, has gone a stage further. It has developed a digital sign called TABANAR, which sports an integrated camera. When a passer-by approaches, software determines his sex, approximate age and hair growth. Shoppers can then be enticed with highly targeted advertisements: action figures for little boys, for example, or razors for beardless men. If the person begins to turn away, TABANAR launches a different ad, perhaps with dramatic music. If he comes back later, TABANAR can show yet another advertisement. “You tend to go: ‘Wow, thanks, how did you know I needed that?’,” says Rob Fitzpatrick of NICTA."

At P&G, I led an effort in kiosks that enabled a perspective consumer to conduct virtual beauty care at the shelf for beauty care products.  Such services have existed in South Korea in specific but they may be going main stream across the world in other CPG categories:

"Computer vision has even advanced to the point that it can perform internet searches with an image, rather than key words, as a search term. Later this year Accenture, a consulting firm, will launch a free service, called Accenture Mobile Object-Recognition Platform (AMORP), that will enable people to use images sent from mobile phones to look things up on the web. After sending an image of, say, a Chinese delicacy, a curious foodie might receive information gleaned from AsianFoodGrocer.com, for example. Fredrik Linaker, head of the AMORP project at Accenture’s research centre in Sofia Antipolis, France, likens the project to “physical-world hyperlinking”."

The use of computer vision based applications beyond consumer centric opportunities are tremendous as well.  The article discusses the applicability and examples of use in intelligence and safety sector also.

21st Century eCPG (electronic consumer products goods) Leader - Cisco?

The appetite of the 21st century consumer when it comes to electronic or digital products is an area that continues to see expenditure versus other sectors. In the digital world all bits flow to the routers, just like all water flows to the oceans. Cisco is starting to own all the digital waterways with it's over 130 acquisitions in the last few years. The recent acquisition of Flip has me wondering if Cisco will be the P&G of the electronic consumer product goods of the 21st century?

If nothing else, I declare that the new term eCPG requires application to Cisco. Question is if growth through M&A activity or acquisitions can be considered consumer innovation?

Curious as to where is Intel?

Unilever and New Markets

While reading my friend Franz Dill's blog regarding Unilever here, I was reminded of an excellent article on Unilever's growth and capturing of market share in the emerging economies.

Unilever has been a household name in the emerging markets prior to other consumer product goods companies. It's Lifebuoy disinfectant soap is one of the world's oldest global brands. The above referenced article delves into the competition to be the brand for the household goods of the growing consumer base.

Here is an excerpt from the conclusion of the article:

"Although Unilever has tried to steer clear of head-to-head competition with P&G, that will not always be possible. But with the balance of the world economy shifting, Unilever's head start in emerging markets is a valuable advantage, not least because many of its brands are already well-known there."

The CPG / FMCG market in emerging economies is going to be a race, an adventure of consolidations and let us not forget that new players within those markets will emerge.