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Vol 2, Issue 01, Feb 2020
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Marketing
The case “HeyTea – Redefining Tea in China” talks about the factors that led to the success of Chinese beverage start-up and social media sensation, HeyTea. The case starts out with the history of the company and the way its young founder Nie Yunchen went about developing innovative tea concoctions. The case explains in detail the role played by e-word-of-mouth marketing through social media in creating a buzz around the company’s tea concoctions. The case also discusses in depth the feeling of scarcity that HeyTea created in the minds of millennials about its unique tea concoctions that spawned serpentine queues at its various stores. A critical view is also taken about the phenomenon of perpetual long queues at HeyTea and questions are raised about the possibility of their being sustained in the long term. The case ends with a look into the future prospects of HeyTea and the possibility of it emerging as a leading beverage brand in China.
HeyTea – Redefining Tea in China
Cosmetics companies, from well-established multinationals to start-ups, are reaping rich dividends by adopting influencer marketing to engage consumers across different social media platforms, including YouTube, Facebook, and Instagram. Various established cosmetic brands like L’Oreal and Avon and new entrants like The Man Company and Frank Body have used the influencer marketing strategy to improve brand relevance and brand awareness of existing beauty products and to launch new beauty products in the market. Influencer marketing is expected to grow tremendously in future on account of rising consumer trust in influencers, the wider reach of influencer marketing, and the gradual replacement of TV time with mobile screen time. Among influencers, micro (non-celebrities with 10,000 to 50,000 followers) and nano-influencers (non-celebrities with 1,000 to 10,000 followers) were expected to be preferred by marketers on account of their expertise in a particular field and genuine interest in brands.
Influencers: Key Voice in Driving Brand Value of Beauty Products
McDonald’s, which entered the country in 1996, operated through two master franchisees, one a 50-50 joint venture with Vikram Bakshi called Connaught Plaza Restaurants (CPRL) covering the northern and eastern parts of the country, and another with Hardcastle Restaurants Pvt. Ltd (HRPL) owned by Amit Jatia, covering the southern and western parts. In 2008, after more than 15 years of smooth operations during which McDonald’s acquired a pan-India presence and became synonymous with fast food in the country, the partnership between Bakshi and McDonald’s turned sour after McDonald’s tried to buy out Bakshi’s 50% stake. McDonald’s contended that CPRL was not maintaining the required quality and had failed to pay royalties for two years. In 2013, Bakshi was ousted as the MD of CPRL, but he was reinstated in 2017 after the case was referred to the National Company Law Tribunal (NCLT). The tribunal also barred McDonald’s from interfering in CPRL’s operations. On August 21, 2017, McDonald’s terminated the franchise agreement with CPRL for 169 restaurants operating across northern and eastern India. Bakshi, however, continued to run his outlets as he had earlier. As the impasse continued, competitors started gaining ground in the lucrative Indian QSR market. McDonald’s posted a loss of Rs. 3.05 billion in the financial year ended December 2017. Moreover, the mass closure of the restaurants disappointed customers and affected the brand image of McDonald’s in the country. Going forward, analysts feared that McDonald’s could lose a long-term growth opportunity in India’s rapidly growing QSR market if it did not sort out its problems soon.
McDonald’s Franchise in Trouble in India
In 2018, Dilip Kapur (Kapur), founder and president of Hidesign, was on the horns of a dilemma. Over the last 40 years, he had built up Hidesign, which was considered to be one of the first brands from India to have succeeded in the global fashion marketplace. While his global ambitions remained intact, Kapur felt that India was where the real action lay when it came to the future of Hidesign. But the Indian market posed its own set of challenges though it was growing at 15% per annum compared to the global rate of 3-5%. Kapur’s aim was to grow at 25% but he was still thinking about where that growth would come from. Should Hidesign focus on other channels? Should it go upward on the pyramid where it would face established global brands such as Michael Kors, Coach, and so on, vying for a market that was smaller and very tough? Or, should it go downward on the pyramid into a larger market with a less expensive sub-brand? How would he maintain the positioning then? Would it come at the cost of diluting the Hidesign brand for regular customers?
Hidesign’s Positioning Challenge in India
The caselet is about ‘Kan Khajura Tesan,’ (KKT), an innovative marketing campaign launched by HUL in 2013 to provide entertainment to the people living in the media dark remote rural areas of India and to advertise the company’s products through entertainment channels on the mobile platform. ‘Give us a missed call and get free entertainment’ was the promotional message of the campaign. The campaign was a win-win strategy for both consumers and the company. The people benefitted from the mobile entertainment while the company gained a lot in terms of mobilizing potential consumers and running a massive awareness drive for its brand products.
HUL’s Mobile Marketing Campaign: Kan Khajura Tesan
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