Start-ups and shrewd marketing moves

Less is more. The rookies of the merchandising world never tire of telling us this - now or then.

Five years ago, when two young men began building a ‘click and order' bookstore, advertising their wares in the conventional media was the last thing their Rs 4-lakh savings pool would have allowed. Chandigarh-bred IIT buddies Sachin Bansal and Binny Bansal churned their sales machine purely by word of mouth, via blogs and even by being there at book fairs. Flipkart today is not only the barely-30 Bansals' big story, it has turned out to be India's biggest e-tail marvel. It's another thing now that they eventually took the ad plunge - after all, Flipkart's sales are ticking away towards Rs 500 crore this year, for little money they splashed on promos.

Yet another start-up is merrily slurping on its success story with minimal spend and giving much bigger rivals ulcers along with a run for their money. Popular noodles and sauces brand Ching's Secret is one of the most digitally present FMCG brands. Ajaay Gupta's Mumbai-based Capital Foods smartly uses YouTube and social marketing media to ace MNC rivals on the shelves.

What's with the cool new Davids of marketing with their out-of-the box low-cost/ no-cost promotions? Ask Jessie Paul, former Wipro Chief Marketing Officer who has said it all in her much-read No Money Marketing . No-cost marketing that most successful start-ups employ is one mantra to reduce wastage even as they reach the target, says Paul, CEO of Paul Writer Strategic Advisory that she floated in late 2009 for start-ups.

Smart, not stingy

Frugal marketing, according to Pavan Padaki, Director - Insights and Creative at brand consultancy Brand-Comm, should not be seen as a compromised marketing strategy. It allows you to be innovative, demands that you be smarter and more effective than the rest of the pack. “Just because I don't have a big (marketing) budget, people should not think I have no money. It is more about being smart, innovative and impactful … It is also more about cutting waste than about cutting cost.”

The spend-little-on-marketing concept has been around for a while. It's a mindset that gets you to make Rs 100 look like Rs 150, she says. It's not just because you don't have money. The inclination is in a company's culture, every industry has it, even large companies such as CitiBank and Unilever have tried it, by being online or associating themselves with sports. But it's the start-ups that seem to have polished the tricks and branded them as their own. ‘FM' is a way of life for Paul.

Some years ago, big-buck IT companies found out a frugal way to recruit, Padaki reminds us. “The HR people boosted their internal communications and started rewarding employees for referrals. The result: What used to be an eight-page appointments pull-out in newspapers has come down to four pages. And for a fifth - or a lakh of rupees - of the cost of newspaper insertions, the companies got the talent they wanted.”

For Bangalore-based brand guru Manosh R. Sengupta, it's nothing but jugaad ; a value system rather than smart marketing jargon. Improvisation in the face of scarce resources is a genetically ingrained survival skill in Indians and it is this DNA that in many ways defines us from the rest of the world. Says Brand-@titude's Parent, Nurturer and Mentor, “For me, the concept of frugality has always existed in India. In fact, it is a way of life for us.” The cost-conscious entrepreneur makes do somehow with whatever little resources there are at his or her disposal. The key here is the improvisation that gets into the game.

Spurred by recession

As Padaki sees it, “Recession was one of the best things to happen to the marketing world, it has made many people invent and re-invent the way to market.”

Today's commonplace platforms - blogs, the Internet, Facebook, Twitter and YouTube - give you instant responses and interaction and quickly tell you where you stand. The newbie venture knows its market reach almost immediately. Ten years ago you had to wait for the results to know if you had made it or not.

In Paul's view, low-cost marketing is not about saving money but about how effective your message to buyers is. While there are eye-popping successes such as direct marketing star Tupperware, offbeat prize campaigns such as the Mahindra ‘guess the price' campaign for Xylo, she remarks, “We have not done that good a job with low-cost marketing, for the majority of brands is hooked to mass media. In India, the social media penetration is low, FB sales are low and companies cannot do online marketing alone.”

It's unconfirmed but apparently some new ventures gained 30 per cent by value when they thought up their own ‘priceless' market drives.

Brand-@titude's Sengupta recalls how upstart soapsud Nirma years ago ‘walloped' an MNC detergents brand. “It used a mix of price competitiveness; focus on trade margins and the radio - and later the TV - to promote the brand. The frugal jingle still airs and has a high recall.

Of late, umpteen new domestic cell phone manufacturers have sprung up and easily sliced the pie off MNC brands such as Nokia, Samsung, Sony Ericsson or Motorola. Sengupta observes, “The Indian mobile handset manufacturers are a sparkling example of how to take on the MNC giants in a David vs Goliath scenario. The segment that populates the lower portion of the pyramid seeks affordable solutions to achieve its sense of aspirations and Indian brands have made it possible through pricing and reach … an area where the fancier MNC brands have failed. Additionally, Indian brands have better insights into the consumer psyche and offer apps that are more utility-oriented.”

None of these efforts required any big spends or big media. So, frugal marketing, which always existed, has become a buzzword and caught on.

Sengupta is certain that “Frugal marketing, if not already there, will inevitably become a cornerstone of any marketing culture. We already see it happening. CMOs are under pressure to justify marketing ROI, and this inevitably leads to innovation.”

The day may not be far when the social media and digital technology - the platforms that we now put in the frugal marketing bracket due to their low cost - will very soon become part of the mainstream thanks to alert, experimenting marketers - as Jessie Paul and Sengupta foresee it. Although small companies even now get pushed into ‘doing three ads', Paul believes that gradually “low-cost marketing is already so much a way of life” that more and more Indian companies will have to look at it. One day it may be the full new order.

> madhu@thehindu.co.in