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Harnessing the ‘Transience effect’ in marketing  

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DQW Bureau
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Looks like its season for bad news all around! First the US economy goes into first gear. Then you have a defense scam creating ‘Tehelka’. No sooner do you recover that you have the Madhavpur Co-operative bank scam. And finally, all hopes raised are belied as India loses the One-Day International (ODI) series against Australia. So where is it to end?Doom Sayers may not be willing to relent. The excise cut on cars did not perk up sales. So carmakers went on a threatening mode–“We will increase prices from April. Better buy now”. Seems to have worked for them, as the latter part of March saw sudden spurt in sales. Moral of the story–if you want to have it your way, wield the stick!

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It is interesting how people use fear as a promotional tool. There used to be a time when sellers would use the ‘budget’ in February-end every year to make people buy before the price rise.

There is an equally interesting angle on the flip side. When sellers reduce prices, it does not seem to have the same magnitude of impact. One would think (logically) that price cuts would boost sales! Does it? The recent excise cut on cars would prove otherwise.

Extending this example, let us explore a little further. At what stage does human activity get triggered? If you analyze closely, you will find that a falling market is not a booster of sales. When share prices are falling, you keep waiting for them to fall more. And so it is with a whole lot of other investments like land, gold etc. The buying trigger is based in the individual assessment of when the situation will change.

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On the other hand when prices are increasing, you tend to start buying in the hope of making good profits later. The story is exactly the opposite of what you would expect. You tend to buy more in an upwardly mobile price scenario. (Does that explain why Chidambaram’s dream budget failed and why Yashwant Sinha’s dream budget did not create the floods right away)?

The magic mantra in marketing, therefore, is not how you are priced, but what trigger effects you can create and how frequently. The FMCG and consumer durable segment seems to have realized the importance of triggers much better than the others have.

It is the ‘transience’ of things that creates interest in human beings. Whatever is perceived as permanent seems to make him lose interest. The transience of youth makes people pay extra attention to their looks and take care of it. The limited period promotional sales schemes tend to draw huge crowds. The uncertainty of employment in private companies generally makes people work harder than the their counterparts in secure government jobs. Permanence somehow creates complacency. Transience keeps you on your toes! (Does this explain the performance level of some of our senior cricket players?)

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The transience effect needs to be studied in more detail than has probably happened till date. It is something that is intricately linked to human behavior and can therefore lead to significant insights into marketing theories and practices.

Just like people talk of building technologies around man’s social behavioral patterns so that the technology gets adopted with ease and picks up. Similarly building marketing strategies around the transience effect has great potential.

Hard core purists in marketing, denounce ‘promos’ (a form of transience marketing) as a low end marketing gimmick. According to them it demeans the value of the brand. I feel these are two separate issues. Building brand has to do with creating value for the product or service or the organization. ‘Promos’ on the other hand is purely a sales generation activity. It is not a substitute for building the brand. Ideally you should first build the brand and then get into any kind of sales boosting activity in the form of a promo.

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For those who have built the brand, creating a sustained strategy for leveraging the transience effect may be a key long-term initiative. Strategy by definition means weaving a short-term tactical strength into a long-term competitive advantage.

Lets look at McDonald’s as an example. Their ‘Happy Meal’ program is an excellent example of converting the transience effect into a long-term sales strategy. Maggi noodles too have been good at this. By giving away freebees that form a part of a range, they are able to create as well as sustain interest. What’s more, they also create curiosity for what is to come!

Obviously, nothing comes free. You need to first build you brand so that you can charge enough to build in the cost of the freebee. Otherwise, every time you do so, you actually eat out of your profits.

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The challenge for other industries is obviously to explore if they can build the transience effect into their marketing programs, and in what manner. It may be easier for the product guys. But I am sure with a bit of thought; people in the services business too should be able to come up with ideas. I am sure the IT businesses would do well. Pursue this thought, since they are usually a part of the ‘falling market syndrome’.

So if Mr. Sinha’s budget has not been a dream come true for the hardware sector, never mind! Ever heard of any FMCG business unduly bothering about the budget. Learn them and get the transience effect working for you.

Sumit Sharma is VP, Microland and the author of the book titled
"The Corporate Circus.' The views expressed in this article are of the
author's and not of Microland.

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