Marketing on Youth
An outline of how Nepali marketers are devising strategies to lure the brand-slut youth segment
By Sandeep Gautam
Funky, rebellious and restless—uninhibited in spending and one step ahead of marketers, today’s fickle youth segment is a formidable yet lucrative growing market. Therefore, marketers across the world are compelled to explore creative roadmaps to etch their brand names into the youths’ hyperkinetic minds. With newer trends evolving ever faster and the youth marketplace changing by months if not days, marketers are finding it arduous to keep tab on youth aspirations and to roll out appropriate promotional campaigns before those fads fade out. Repeating age old marketing strategies is an absolute boo boo!
Sticky Questions
Are your marketing strategies able to build credibility yet remaining cool to capture youth loyalty? Is your brand able to engage, interact, communicate and converse with youths? Are your marketing strategies dynamic enough to tick in sync with their hearts and minds? How are you going to translate that into topline and bottomline sales of the corporate scorecards? These are some questions that have been haunting Nepali marketers as well. And the apparent reasons they would hastily dig out are: size of the market, consumer ignorance and their inability to access rural markets due to rugged terrains and political disturbances. Not a streak of doubt about that. But when it comes to youth market, the explanation doesn’t seem to fit into market realities. No doubt that it’s difficult to trap this market segment even for the international players like Pepsi or Mc Donald’s. But they are managing to overcome these difficulties with innovative marketing strategies in which they shove millions of dollars to come up with effective promotional campaigns. But in our part of the world, marketers tend to limit themselves in offering freebies such as gold coins or cash, discount or free meals which may be effective in some instances but not generally. So what Nepali youths really want from brands and services? And how are the Nepali marketers attempting to tap this huge market?
Corporates and their marketing attempts
Bhaskar Dhungana, the man behind Jai Nepal and Kumari Cinema halls that have been attracting the youth quite effectively for some time now, says: “When it comes to young customers, moderate pricing is important in Nepal . We can’t bank upon high-spending youths since the number is too limited here.” Recollecting his marketing experience when Kumari Hall was about to start operation in all-new youth-oriented format, he says: “We tried to experiment with the price factor. We offered tickets in low prices but that barely helped us in increasing customer volume. The outcome taught us that the younger generation is ready to shell out a little more bucks if they get quality service in return. Pricing is definitely a deciding factor but quality is much more important,” he adds. Dhungana also says that though his company Quest Entertainment doesn’t have any exclusive marketing plan to persuade young customers, they do acknowledge them as their major source of revenue. “The demography of Nepal is such that you can’t afford to exclude youths. We place ads in newspapers, magazines and websites that have good access into the young mass. We have put hoarding boards at different places in collaboration with Royal Stag. We have similar promotional tie-ups with other organisations as well,” he further adds.
Likewise, Spice Nepal Pvt. Ltd., the company behind Mero Mobile, started its promotional campaign with a slew of music concerts. “We started with music concerts to make an indelible patch with the spending young consumers. People soon labeled Mero Mobile a youth product, and that was exactly what we wanted to achieve. But now we have to change the tack—we want to promote our brand as a mass product to expand our business volume and to cater to people from all walks of life,” says Sanat Acharya, Brand Manager, Spice Nepal.
Based on his company’s experience of marketing to the youth, Acharya says: “With increasing access to foreign trends and cultures, Nepali youths have undergone significant changes in their choices for products and services, whether in fashion, accessories or telecommunications. If Nokia launches its latest mobile set in the USA , the youths want it in Nepal the very next day. So, while devising marketing plans and activities, we don’t forget to access prevailing youth mindset. Linking our brand with young consumers has paid us back. We already have more than 600,000 subscribers. We also take pride in admitting that we have enhanced the concert culture in Nepal —from sound quality and stage designs to tours—which has immensely helped us in solidifying our brand image.”
However, Acharya admits that the youth market is difficult to tread into. “This market is very demanding. You got to have a quality product at a reasonable price with some embedded features. And you need to keep them updated. If there is nothing new and exciting about your product, it’s destined to fail as young consumers are unforgiving. Young people want new products with “cool” factors attached to them.”
Young consumers and the ‘cool’ factor
Surya Nepal (P.) Ltd. seems to have paid good attention to this ‘cool factor’ in their apparel brands—John Players and Springwood – as well as in their cigarette brands. John Players is an established brand now thanks to its brand ambassador Hritik Roshan, revered as a youth icon in India . The perfect synergy between a product and its brand ambassador has a huge promotional value. Quality is not an issue for them. Take example of Springwood. The company says to have carried out a nationwide study to determine the fitness part. It’s a brand fit for Nepali men since so much effort had been put into measuring different body shapes and sizes of young men from across the country covering all the ethnic types. To ensure the quality of the garments, the interlinings used in the shirts have been imported from Germany , which maintains shirt quality even after several washes. Each and every fabric passes through stringent tests and inspections at various stages of production, as described in the official release on brand description. Teaming the product with a convincing slogan and a confident young face of Nepali ethnicity, Springwood is making quick progress, despite its price tag, which is a little bulky when compared with the wallet of average middle-class Nepali youth. But as Bhaskar Dhungana has stressed earlier, pricing alone, as he has experienced, doesn’t influence consumer decisions in general, especially when we talk about youths, particularly when it comes to quality products.
The condition is similar with service industries, especially with the financial institutions. Nabil Bank has various schemes for its young clients. Their pre-paid card CoolCash, especially targeted at youths, is quite popular. Accessing the youth market, Raveena Joshi, Head of Personal Lending and Inward Sourcing at Nabil, says, “A market made up of young consumers has a progressive pulse to it. It can be vibrant and progressive but can get challenging at the same time. It can be a propeller which instigates those seeking to cater to the needs of young consumers, in terms of innovative products and services.”
While dishing out credit and debit card facilities such as NabilSikshya (under which educational loan is provided also for additional costs other than tuition fees) and pre-paid cards, Joshi has encountered several limitations owing to this fast-evolving but unpredictable market segment. According to her they are: Turn Around time: “Youths are dynamic and want things to move at the fastest speed possible. We as service providers need to ensure that service delivery time is kept simple and as short as possible,” she says. Interest rate offerings: “Youths prefer to stay updated about the market trends and take competitive pricing as a deciding factor, she adds. Documentation formalities: “The most nagging factor is the amount of time that goes into this activity,” she points out. According to her, shehas learnt that youthsdo not prefer to stand in queues for documentation formalities, which is a major challenge that a bank like hers usually encounters. “It is important that we review our practices at regular intervals so as to reduce the time required for documentation formalities to make the delivery process easy and quick,” she adds.
Nabil spends approximately two percent of its annual turnover in its promotional activities. Joshi says her institution carries out surveys over consumer demand and possible impact of their products/services prior to introducing them in the market.
About the spending habit of youths, their surveys indicate that, “The younger generation has good spending habits as compared to their elders, which ensures their access to comforts of living and supports the concept of retail lending—‘buy-now-and pay-later.” “Youths are brand conscious and supportive to brand values. This has immensely helped in the progress of the retail market,” she says. Nabil has segmented the youth market on the basis of age, family background, educational background and gender.
Similarly, Nepal Industrial and Commercial( NIC) Bank follows direct sales marketing strategy when it comes to selling their products/services to the young clients. “This market segment, composed of youths, is growing fast with lots of upcoming opportunities for the banking sector, especially in case of products/services targeted at them like education loans, deposit products, and cards,” says Sunil Rana, Product Manager at NIC Bank. The biggest challenge to tap this sprouting market is, according to him, the lack of proper distribution channel. “We have been compelled to use dual distribution channel to access the youth market,” he comments. However, with the spending habits of youths getting more liberal, coupled with growing brand consciousness among them, he expects more business opportunities coming his way. “We have been successful in teaching banking and cultivating saving habits among the young consumers with our scheme that lets them open an account with just Rs. 100,” adds Rana. His institution has segmented the youth market according to their products/services, like NIC Sikshya Kosh, Banking on Youth etc.
Informed decisions
Having just launched the cheese-ball brand, U-N-Me, Rabindra Man Shrestha, Promoter of the company behind it, who has already worked for other brands targeted to the youth like Carlsberg and Tuborg beer, Surya cigarettes and Mayos instant noodles, says the youth market has changed substantially over the last ten years due to their growing access to education and satellite channels. “Youths are better informed these days,” he says, adding, “so we are dealing with a very competitive market. If you are thinking of launching a brand or some sort of service, you need to be careful about presentation. If you launch a product just for the sake of launching it, the youths will barely be interested. There must be an element of style and elegance in your product.” He further says that a brand needs to exert an intense pull on young consumers to make them long for it. Unless a product ticks in sync with their hearts and minds, it’s destined to fail miserably in the youth market.
Brand Sluts
One major characteristic of Nepali youths is that they are “brand sluts”, to borrow the term from J Walter Thomson’s Executive Vice President Marian Salzman. Brand sluts are those who frequently switch from one brand to another with no sense of fidelity to any of them. For example, Manish Thapa, CEO of ANS Creations Pvt. Ltd., an advertising agency promoting the shoes brand Fitrite, thinks that the Nepali young consumers are too volatile. “They are not loyal to brands. You have to put them on constant reminders through advertisements. The brand message should be trendy and inspiring. I say inspiring because today’s youths are ambitious and nurture high dreams. So they prefer to opt for the brands that inspire them,” he says. “Branding, promotion and awareness are three different roles of advertising. It depends on various factors like the market share occupied by the competing brands, what stage of product life cycle we are at and our sales target.” Young people are brand conscious but not loyal in his perspective. “That’s why they keep switching brands. They might purchase Adidas today but switch to Reebok tomorrow. They are impulsive, attracted by bright colours and are futuristic,” he adds.
Brand ambassadors
Among other major players in the youth market, Dabur Nepal has been promoting its beauty, hair-care and health products through a popular marketing practice—signing in Miss Nepals, Bollywood actresses and famous models and sports stars as brand ambassadors.
And as Manish said earlier, if the representing person is inspiring and influential, the brand kicks off. Examples in this respect can be drawn from cola giants Coke and Pepsi, sports-wear veterans like Nike, Reebok and Adidas and fast-food multinationals like McDonald’s. Except variations in their advertisement styles, their core marketing strategies are similar when it comes to young consumers - inspire them, hook them and persuade them. Literally, that’s how the world does it, though factors like limited market and poor earning capacity of the young Nepali consumers has been making Nepali marketers hesitant to shell out millions in big advertisement campaigns.
But price factor alone hasn’t held them back from trying this tested promotion method. According to market observers, after 2PM noodles signed Rajesh Hamal as its brand ambassador, the sales figure increased manifold. But finding a Nepali youth icon is a challenging job in Nepal . G. Mullick, Country Manager for liquor major McDowell Nepal Ltd (now United Spirits Nepal Pvt. Ltd.). encountered the same problem a couple of years ago before signing Deepak Bajracharya as the brand ambassador for their whisky brand Bagpiper. “In Nepal , people only recognise stars from music, movies and sports,” he had commented talking to Kathmandu Infotiser magazine a couple of years ago. “Other sectors don’t really have that much youth icons. We carried out a survey regarding this and found out three names with highest calling among the youths. Deepak was one.”
Nima Rumba, Sangina Baidya, Rajesh Hamal and Niruta Singh are some common faces that have graced several brands, from noodles to bikes, but their presence as brand ambassadors hasn’t helped brands in all occasions. Place and placement can be taken as prime determinants in this connection. Rajesh Hamal sells big in villages but Nima Rumba hardly makes an impact there. It’s same with Niruta Singh in villages and Deepak Bajracharya in towns. The limitation of promotional budget has forced many companies to opt for a single person and a single advertisement style for all places, which naturally doesn’t yield desired results. That’s probably why the promotional campaigns for Khukuri Cigarettes are concentrated more in the villages. And that’s probably why most of the Indian shampoo manufacturers (and their Nepali subsidiaries) have come up with the sachet packing. Through this creative manufacturing and marketing approach, they have been offering rural youths a chance to use the products that they can’t buy in bigger packs.
Capital compulsion
Despite Nepal being spread across over 141,000 square kilometers, Kathmandu valley has been the focal point for all kinds of marketers. This is a sort of common practice compelled on the part of marketers by the difficulty in accessing various parts outside the capital and the scattered settlements with very low concentration of the consumers in any single particular locality. The three districts of the capital valley account for more than 2 million people or more than 7 percent of the total population of the country, according to the Population Census, 2001. The average income level of the valley residents is much higher than in outside the valley. For most of the products, Kathmandu valley accounts for some 40 percent to 60 percent of the total sales volume, according to the sources associated with respective products.
Price Sensitivity
Nine out of ten Nepali managers and businessmen can be found complaining about the lack of quality consciousness among the Nepali consumers—young as well as old. The impressive sales of the cheap Chinese products back up this refrain. Some marketers point out that such price consciousness may describe the innate behavior of about 80 percent consumers from all walks of life. That leaves about 20 percent who keep tabs on quality. One explanation is that the price consciousness means not preferring cheaper goods, but goods that involve less cash outflow. This interpretation indicates the need for bringing mini and micro packs. This logic that price consciousness has more to do with size of cash outflow is supported also by the fact that the hire-purchase facility has substantially increased the sales volume of the consumer durables even though the total amount to be paid out is higher in this method than in total down payment method. If this is so, the lesson for business firms would be to teach the consumers about the importance of quality.
Predominantly rural
Though the business volume may be big in Kathmandu and in other urban areas, the Nepali villages offer ripe market in terms of the number of consumers as about 84 percent of the population lives in the rural areas. Even some so-called urban areas are in fact rural in character. But this rural number can’t be banked upon since it’s not rich in cash. For this reason, some companies that came up also with mini-packs of their products are still to be able to derive expected benefits. One way to benefit from rural opportunity would be to develop a system under which you also buy the products from the rural areas thus increasing the cash income of the rural people, and in return offer them your products especially designed and packaged taking into consideration the needs of such consumers. Some old Nepali business houses, involved in agro-processing, had tried to work in this way but their focus laid entirely in Terai where the accessibility was relatively easier.
Media influence on customer decisions
Though no specific research in this issue has been found to have carried out in the national level, the practicing managers believe television has the highest influence on consumers, followed by print media, radio and the word-of-mouth advertisement in that order. Some general surveys conducted by institutions like AC Nielsen (ORG-MARG) Nepal show that in Kathmandu TV ownership is higher than radio ownership while in rural areas, households with radio sets far outnumber those with TV sets. If we believe these data and what marketers have to say, the indication is that the number of viewers per TV set is very high in rural Nepal . So television could also be a very useful means to reach to young rural mass. It can further be used to raise awareness about products and educate them about the importance of quality. This way the rural youths, too, can be major buyers for several products. The marketers just need to take care of micro packaging and the distribution channel. Rest they can do through television, radios and word-of-mouth advertisements.
Air of luxury
The sense of luxury is still miles away from ordinary Nepali consumers, which comes along with big brands and with a lot of money. Except a handful of popular brands in sports-wears, fast-foods, suiting and shirting, watches, shoes, leather accessories, jeans and perfumes, even upper-class and middle-upper class young consumers haven’t got their hands on the scores of other international biggies. It’s something relatively new to India too even after their more than a decade of economic miracle. The concept of departmental stores and boutiques is barely settling in Nepal and looking up to shopping malls is something too lavish for a big chunk of young population which dominates the country’s demography. Owning brands like Chanel, Versace, Dior, Valentino, and Giorgio Armani in fashion brands; Rolex, Omega, Cartier, Vacheron Constantin and Breitling in watches; Park Avenue, Allen Solly and Reid & Taylor in suiting and shirting; Bulgari, Cartier, Tiffany, De Beers and Chopard in jewelries and Estée Lauder, Lancôme and Guerlain in beauty products is an air of unattainable luxury for most of them. If the political situation improves and economy gets back on track, the ‘luxury’ can turn into ‘possession’. But it will take a lot of time if the economic development keeps on moving in a snail’s pace. Therefore, it’s still a far-fetched dream for us to become brand-savvy.
