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-
est per capita chocolate consumption in the
world, and there is no competition in sight
— closest competitor Nestlé has less than
20 per cent market share — Mondelez has its
task cut out: How does one keep the spirit of
innovation alive and not slip into a fatal
ennui. From the looks of it, Mondelez has
decided not to let the consumer down.
In the past six months, Mondelez India has
introduced five new variants of Cadbury cho-
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
2016, Mondelez introduced Cadbury Fuse and
followed it up with Cadbury Dairy Milk Silk
Oreo in January 2017. According to Nielsen, the
Cadbury Dairy Milk portfolio continues to be
the biggest chocolate brand in India com-
manding a market share of 40 per cent. So, it
is no surprise that Mondelez India is betting
big on Cadbury. Since chocolate is a product
that isn’t a necessity but an indulgence, it is
imperative for Mondelez India to grow the cat-
egory by exciting the consumer and making
chocolates relevant in their lives. This explains
the thrust on new launches and variants.
“Over the last five or six years, affluence in
the country is on the rise. Indians are travelling
more and having been exposed to global
flavours they are looking for similar offerings
back home,” says Prashant Peres, director,
marketing (chocolates), Mondelez India.
He acknowledges that competition in the
industry is limited, but the chocolate catego-
ry is poised to take off and, when this happens,
product innovation will take the centre stage.
The key to innovation for Mondelez India
is to “identify new and fresh consumer needs
and come up with a solution which is long-
term and brings higher gains for the brand”.
Following the launch of Cadbury Dairy
Milk Silk, consumers sought greater variety
inspiring the company to come up with new
variants. Mondelez India consistently profiles
Mondelez India Director, Marketing (Chocolates), Prashant Peres at the launch of Cadbury Fuse last year. In the past six months, Mondelez
India has introduced five new variants of Cadbury chocolate
STEPS AHEAD
| The key, Mondelez India | It profiles and matches Indian | Its challenges remain
says, is to identify fresh consumers’ aspirations and changing people’s
consumer needs and marries them with its global choice and palates
come up with a solution products (for example; and pricing compared
which is long term caramel-aerated chocolate) to traditional sweets
and matches Indian consumers’ aspirations Remember the Amitabh Bachchan-starrer
and marries them with its global products. “Pappu pass ho gaya” ad way back in 2006,
For instance, caramel-aerated chocolate which firmly entrenched Cadbury as the ulti-
is a popular format globally and promotes mate sweet to celebrate joyous occasions with
indulgence. The company has introduced family and friends. More recently, the “Saas
this product in India as well. It has innovat- bahu dosti” campaign brought two adversari-
ed with Fuse, which offers consumers a mul- al women together to shake a leg to the popu-
ti-textured experience. As the company lar Hindi song “Saat samundar paar” while
adapts global formats to India it takes it a sharing a bar of Cadbury Dairy Milk.
year and a half to localise a product to meet As a brand, Cadbury has been eyeing Ind-
Indian tastes. Fuse, for one, is soft and full of ian festivals and modern events such as Fri-
caramel. It offers the sweetness of a choco- endship Day to pitch them as the perfect occa-
late and crunch of a peanut. sions to gift and celebrate with chocolates.
For a product to be a hit in the Indian mar- Samit Sinha, founder and managing part-
ket, the company backs its innovations with ner, Alchemist Brand Consulting, points out
communication that is high on humour. that for Mondelez India and its flagship
Cadbury brand to grow in the market, it has to
start wresting the share away from the tradi-
tional Indian sweets. As a case in point, the
“Pappu pass ho gaya” campaign was aimed at
substituting the traditional ladoo with choco-
late as the default pick for celebration.
Most importantly, Sinha says, “the challen-
ge before Mondelez India is as basic as chang-
ing people’s choice and palates. There are cer-
tain sweets that are intrinsically linked with
Indian taste buds and traditions. The compa-
ny is introducing a foreign concept and alien
taste to the buyers here. This is both time- as
well as money-consuming”.
He points out that another challenge fac-
ing the company is on the price front. For a
majority of Indians, chocolate is sinful
indulgence. “Paying ~10 or ~30 for a bar of
chocolate is still not seen as value for mon-
ey.” Hence, to widen the consumer base,
Mondelez India needs to further lower the
cost of its products. It can learn a lesson or
two on the pricing front from éclair, which
launched affordable toffees with the taste
of chocolate to a large section.
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
have a smaller R&D budget than other organisations of similar size, but
that does not mean they are less innovative. For every dollar invested
in R&D, they get more innovative output, measured by number of
patents, new products, or revenues generated with new products. An
explanation for this, offered by the authors, is that entrepreneurial fam-
ilies tend to concentrate their wealth in one or few firms (for instance,
the Walton family’s huge wealth concentration in Walmart). “These
families are very cautious about investments, aiming to avoid any
waste. Family firm owners can use their powerful shareholder positions
to ensure that managers engage only in prudent investments.”
IoT botnets present unimaginable
cybersecurity risk, says Juniper
New data from Juniper Research
has found that the consumer IoT
(Internet of Things) installed base
will reach over 15 billion units by
2021, an increase of 120 per cent
over 2016. Embedded connectiv-
ity is increasingly being used as a
product differentiator. However,
Juniper cautioned that the vast
scale of this connectivity will,
unless action is taken, lead to an
unmanageable cybersecurity risk created by botnets in excess of 1 mil-
lion units. Recent IoT botnets will prove merely to be the tip of the
cybersecurity iceberg, according to the Internet of Things for Security
Providers: Opportunities, Strategies, & Market Leaders 2016-2021.
The report found that the use of botnets to disrupt Internet serv-
ices forms a part of the near-term threat landscape. It predicted that
botnets will be used for more malicious purposes in future, impacting
consumer, industrial and public services markets. The research called
on IoT device manufacturers to “take responsibility” by implement-
ing security-by-design, adding that corporate-scale vendors such as
Amazon, Google and Samsung should lead efforts to galvanise other
vendors to apply security best practices. The research also highlight-
ed providers such as Crossword and Positive Technologies who are us-
ing machine learning to disruptively protect against distributed denial-
of-service and malicious network activity. It predicted that the industry
will be forced to move beyond traditional signature-based detection
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
of women-centric In recent years, a series of television
commercials (TVCs) by Titan Raga, the
TV commercials by watch brand for women, has kept pace
Titan Raga presents with the wave of “liberal feminism” in
India. In less than a decade, they’ve
the decision of undergone changes in the choice of actors
— from a glamour queen like Katrina Kaif
childbirth as a to the more cerebral Nimrat Kaur to the
female prerogative unknown — and used the films to
increasingly promote one’s individuality.
After earlier ads batted for women to
decide whether or when they want to get
married as well as end a marriage where
they aren’t treated as equals by their
spouses, the latest ad campaign,
#MomByChoice, talks about the choice of
childbirth as women’s prerogative. The
minute-long ad shows a woman giving a
short but meaningful speech before her
family and friends at her baby shower.
Prodded by her husband, she gets over
initial embarrassment to think aloud as to
what kind of a mother would she turn out
to be. The mom-to-be answers she would
be similar to her mother, whom she
addresses as ghumakkad(wandering) and
one who pursued a PhD at 45. She thanks
her mother for loving her own life as much
as her daughter’s.
Sirish Chandrashekar, marketing head,
Titan Watches, says the ad celebrates the
spirit of a mother who loves and lives life as
much as she loves being a mother. “We
have explored a topic that is much debated
among modern Indian women of today;
motherhood. Choices that women make
after motherhood are judged, often
harshly by society. The confident and
self-assured woman of today is rewriting
the rules of what is acceptable and what is
not as a mother.”
The TVC will run for a month across
movie, entertainment, music and news
channels. Chandrashekar adds, “We also
try to showcase newer and more modern
occasions to look stylish and feel confident
with a Titan Raga. In this film, we have
picked a small occasion like a baby shower
with family and friends.”
Tithi Ghosh, senior vice-president and
head of advertising, Ogilvy & Mather,
South, points out that the agency’s focus
on women wouldn’t waver even as it
becomes more challenging to find fresh
expressions at a time women-centric ads
are increasing. “In the past, we have
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.