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12 STRATEGY MUMBAI | MONDAY, 30 JANUARY 2017

“We are finding out how we can future-proof “We're looking at how our clients would “Food is a significant business for us.
the services business by building a get used to cloud-based environments. We are trying to occupy the breakfast
products and platform business. But With Appirio, we can show how easily and in-between meal moments, which
we do not want to build it from scratch” you can get adapted to one” will be crucial for our growth”
C VIJAYAKUMAR B M BHANUMURTHY D SHIVAKUMAR
President & CEO, HCL Technologies President and chief operating officer, Wipro Chairman & CEO, PepsiCo
> .

Cadbury tickles the palate VANTAGE POINT


INSIGHTS FROM CUTTING-EDGE RESEARCH

Family firms are more innovative


Mondelez India is betting than other companies
Family-owned businesses are
on innovative product among the most innovative in
their industries, belying their per-
variants to lure consumers ception of being risk-averse, tra-
and pre-empt competition ditional and stagnant, say profes-
sors Nadine Kammerlander and
Marc van Essen in an article in
the Harvard Business Review. The
SANGEETA TANWAR authors conducted their research
along with academics Patricio
ith a share of 65 per cent, Mondelez Duran and Thomas Zellweger to

W India is the undisputed leader in the


~7,500-crore chocolate market in the
country. But in a market which has the low-
determine how family firms compare to their non-family counterparts
when it comes to being innovative. The findings, published in the
Academy of Management Journal, show that on average family firms
est per capita chocolate consumption in the have a smaller R&D budget than other organisations of similar size, but
world, and there is no competition in sight that does not mean they are less innovative. For every dollar invested
— closest competitor Nestlé has less than in R&D, they get more innovative output, measured by number of
20 per cent market share — Mondelez has its patents, new products, or revenues generated with new products. An
task cut out: How does one keep the spirit of explanation for this, offered by the authors, is that entrepreneurial fam-
innovation alive and not slip into a fatal ilies tend to concentrate their wealth in one or few firms (for instance,
ennui. From the looks of it, Mondelez has the Walton family’s huge wealth concentration in Walmart). “These
decided not to let the consumer down. families are very cautious about investments, aiming to avoid any
In the past six months, Mondelez India has waste. Family firm owners can use their powerful shareholder positions
introduced five new variants of Cadbury cho- to ensure that managers engage only in prudent investments.”
colate. In August 2016, the company launched
Cadbury Dairy Milk Marvellous Creations,
Cadbury Dairy Milk Silk Pralines and Cadbury
Dairy Milk Silk Miniatures. Next, in September
IoT botnets present unimaginable
2016, Mondelez introduced Cadbury Fuse and
followed it up with Cadbury Dairy Milk Silk cybersecurity risk, says Juniper
Oreo in January 2017. According to Nielsen, the
Cadbury Dairy Milk portfolio continues to be Mondelez India Director, Marketing (Chocolates), Prashant Peres at the launch of Cadbury Fuse last year. In the past six months, Mondelez New data from Juniper Research
the biggest chocolate brand in India com- India has introduced five new variants of Cadbury chocolate has found that the consumer IoT
manding a market share of 40 per cent. So, it (Internet of Things) installed base
is no surprise that Mondelez India is betting
big on Cadbury. Since chocolate is a product
STEPS AHEAD Cadbury brand to grow in the market, it has to
start wresting the share away from the tradi-
will reach over 15 billion units by
2021, an increase of 120 per cent
that isn’t a necessity but an indulgence, it is | The key, Mondelez India | It profiles and matches Indian | Its challenges remain tional Indian sweets. As a case in point, the over 2016. Embedded connectiv-
imperative for Mondelez India to grow the cat- says, is to identify fresh consumers’ aspirations and changing people’s “Pappu pass ho gaya” campaign was aimed at ity is increasingly being used as a
egory by exciting the consumer and making consumer needs and marries them with its global choice and palates substituting the traditional ladoo with choco- product differentiator. However,
chocolates relevant in their lives. This explains come up with a solution products (for example; and pricing compared late as the default pick for celebration. Juniper cautioned that the vast
the thrust on new launches and variants. which is long term caramel-aerated chocolate) to traditional sweets Most importantly, Sinha says, “the challen- scale of this connectivity will,
“Over the last five or six years, affluence in ge before Mondelez India is as basic as chang- unless action is taken, lead to an
the country is on the rise. Indians are travelling ing people’s choice and palates. There are cer- unmanageable cybersecurity risk created by botnets in excess of 1 mil-
more and having been exposed to global and matches Indian consumers’ aspirations Remember the Amitabh Bachchan-starrer tain sweets that are intrinsically linked with lion units. Recent IoT botnets will prove merely to be the tip of the
flavours they are looking for similar offerings and marries them with its global products. “Pappu pass ho gaya” ad way back in 2006, Indian taste buds and traditions. The compa- cybersecurity iceberg, according to the Internet of Things for Security
back home,” says Prashant Peres, director, For instance, caramel-aerated chocolate which firmly entrenched Cadbury as the ulti- ny is introducing a foreign concept and alien Providers: Opportunities, Strategies, & Market Leaders 2016-2021.
marketing (chocolates), Mondelez India. is a popular format globally and promotes mate sweet to celebrate joyous occasions with taste to the buyers here. This is both time- as The report found that the use of botnets to disrupt Internet serv-
He acknowledges that competition in the indulgence. The company has introduced family and friends. More recently, the “Saas well as money-consuming”. ices forms a part of the near-term threat landscape. It predicted that
industry is limited, but the chocolate catego- this product in India as well. It has innovat- bahu dosti” campaign brought two adversari- He points out that another challenge fac- botnets will be used for more malicious purposes in future, impacting
ry is poised to take off and, when this happens, ed with Fuse, which offers consumers a mul- al women together to shake a leg to the popu- ing the company is on the price front. For a consumer, industrial and public services markets. The research called
product innovation will take the centre stage. ti-textured experience. As the company lar Hindi song “Saat samundar paar” while majority of Indians, chocolate is sinful on IoT device manufacturers to “take responsibility” by implement-
The key to innovation for Mondelez India adapts global formats to India it takes it a sharing a bar of Cadbury Dairy Milk. indulgence. “Paying ~10 or ~30 for a bar of ing security-by-design, adding that corporate-scale vendors such as
is to “identify new and fresh consumer needs year and a half to localise a product to meet As a brand, Cadbury has been eyeing Ind- chocolate is still not seen as value for mon- Amazon, Google and Samsung should lead efforts to galvanise other
and come up with a solution which is long- Indian tastes. Fuse, for one, is soft and full of ian festivals and modern events such as Fri- ey.” Hence, to widen the consumer base, vendors to apply security best practices. The research also highlight-
term and brings higher gains for the brand”. caramel. It offers the sweetness of a choco- endship Day to pitch them as the perfect occa- Mondelez India needs to further lower the ed providers such as Crossword and Positive Technologies who are us-
Following the launch of Cadbury Dairy late and crunch of a peanut. sions to gift and celebrate with chocolates. cost of its products. It can learn a lesson or ing machine learning to disruptively protect against distributed denial-
Milk Silk, consumers sought greater variety For a product to be a hit in the Indian mar- Samit Sinha, founder and managing part- two on the pricing front from éclair, which of-service and malicious network activity. It predicted that the industry
inspiring the company to come up with new ket, the company backs its innovations with ner, Alchemist Brand Consulting, points out launched affordable toffees with the taste will be forced to move beyond traditional signature-based detection
variants. Mondelez India consistently profiles communication that is high on humour. that for Mondelez India and its flagship of chocolate to a large section. methods in the near term to address IoT cybersecurity effectively.

STATSPEAK
Consumers willing to pay more to
The most connected AGE
socially responsible companies
BALANCING ACT are most likely to GROUP 16-24 25-34 25-44 45-54 55-65
Seventy-seven per cent of con-
sumers prefer to purchase from
suffer inconsistent MEAN DAILY 4.9 4.7 companies which demonstrate
4.3 3.7 3.3
brand experiences ONLINE HOURS community responsibility, and
are willing to pay five to 10 per
INCONSISTENCY 26% 23% cent more for products from such
OF BRAND 34% 30% firms, according to a recent survey
EXPERIENCE 36%
by Zendesk in partnership with
Union+Webster. The survey cove-
red more than 7,000 people ac-
Different types of  Emerging Asia  Latin America  Middle East and Africa ross eight markets. The conscious
consumers take consumer results by country showed similar patterns. However, there
different paths to 68%
were exceptions. For example, conscious consumers are especially
Brands don’t deliver an equal quality of service purchase, and each 46% 15%
33% 24%
14% 23%
27% 24% 44% 33% prominent in Brazil and Mexico, making up 87 per cent and 85 per cent
33% of all consumers, respectively. They are less common in the UK (67 per
online and offline for nearly a third of consumers use the internet in cent). Willingness to pay more decreases as product costs are increased
CONSUMER
globally, according to the latest Connected Life their own way JOURNEY BRAND BUILDING BRAND ACTIVATION SERVICE ADVOCACY by 10 per cent, as compared to five per cent. This holds true whether
report, research firm Kantar TNS’ annual study of Social as number one the product is purchased for business or personal use. But among con-
connectivity covering 70,000 people across 57 11% 14% 15% 7% 11% 10% 16% 20% 21% scious consumers, nearly as many will purchase at the 10 per cent
source for each activity 30% 37% 37%
markets. The study says marketers need to better % choosing a social uplift. Besides, many conscious consumers also encourage others to
network as their number embrace their purchasing preferences by leaving recommendations on
meet the personal expectations of consumers  Developed Asia  North America  Europe key websites, including Facebook, Twitter and Amazon. Seventy-four
across different touch points one preference
per cent of them are social activators, who leave positive reviews on
Source: Connected Life, Kantar TNS
these sites at least occasionally and want others to act on them.

Brand: Titan Raga


CAMPAIGN LOGIC Budget: ~5-6 crore

Timepiece to reflect women’s choices


Agency: Ogilvy &
Mather

The latest in a series RITWIK SHARMA After earlier ads batted for women to what kind of a mother would she turn out among modern Indian women of today; with a Titan Raga. In this film, we have
decide whether or when they want to get to be. The mom-to-be answers she would motherhood. Choices that women make picked a small occasion like a baby shower
of women-centric In recent years, a series of television married as well as end a marriage where be similar to her mother, whom she after motherhood are judged, often with family and friends.”
commercials (TVCs) by Titan Raga, the they aren’t treated as equals by their addresses as ghumakkad(wandering) and harshly by society. The confident and Tithi Ghosh, senior vice-president and
TV commercials by watch brand for women, has kept pace spouses, the latest ad campaign, one who pursued a PhD at 45. She thanks self-assured woman of today is rewriting head of advertising, Ogilvy & Mather,
Titan Raga presents with the wave of “liberal feminism” in
India. In less than a decade, they’ve
#MomByChoice, talks about the choice of
childbirth as women’s prerogative. The
her mother for loving her own life as much
as her daughter’s.
the rules of what is acceptable and what is
not as a mother.”
South, points out that the agency’s focus
on women wouldn’t waver even as it
the decision of undergone changes in the choice of actors minute-long ad shows a woman giving a Sirish Chandrashekar, marketing head, The TVC will run for a month across becomes more challenging to find fresh
— from a glamour queen like Katrina Kaif short but meaningful speech before her Titan Watches, says the ad celebrates the movie, entertainment, music and news expressions at a time women-centric ads
childbirth as a to the more cerebral Nimrat Kaur to the family and friends at her baby shower. spirit of a mother who loves and lives life as channels. Chandrashekar adds, “We also are increasing. “In the past, we have
female prerogative unknown — and used the films to
increasingly promote one’s individuality.
Prodded by her husband, she gets over
initial embarrassment to think aloud as to
much as she loves being a mother. “We
have explored a topic that is much debated
try to showcase newer and more modern
occasions to look stylish and feel confident
pitched the woman against the
chauvinistic man, society at large or
common workplace biases but this time
we decided to refrain from showing
conflict. We wanted deeper emotional
connect and inclusivity,” she adds.
According to a 2015 report by
Technopak, the Indian watch industry
was projected to grow to ~10,000 crore by
this year. At the time, the branded segment
was estimated at 67 per cent of the overall
market. Market leader Titan enjoys a share
of over 60 per cent of the organised
segment. “Titan has built a certain lineage
in the communication for Raga. The task is
to keep strengthening the values of Raga
— femininity and beauty,” Ghosh adds.