Storm the Norm

by Anisha Motwani

  Strategic smarts that went on to shape Mirchi’s success

  Naming it right!

  The story behind choosing the brand name Mirchi itself is quite interesting. From the onset, the management team was clear that the brand name would be decided via a thorough, research-based, scientific process. All potential brand names—generated on the basis of brainstorming, voxpops and global search—were subjected to extensive consumer research. And in every stage of research, Mirchi (the recommendation of Times Group’s managing director [MD] Vineet Jain, the passionate visionary behind this success) would come LAST! Eventually, though grudgingly, research outcomes were overruled and the MD’s gut prevailed. This, in hindsight, turned out to be an ace in the pack, as the name set the strategic direction for many things to follow. It was an instant hit with audiences…because ‘when you’ve tasted Mirchi, everything else feels bland!’

  The intuitive consumer promise

  The birth of the brand’s tagline, ‘It’s Hot’, itself is another interesting story. A few senior people from the British Broadcasting Corporation (BBC) wanted to know the meaning of ‘Mirchi’. The obvious answer ‘chillies’ led to one of them commenting ‘Oh very hot!’ That was it! A seemingly strategic decision was taken in the most casual of manners.

  Borrowing best practices from the FMCG industry

  So far, media companies were run in a rather haphazard manner. Typically, the content teams ran the show. They produced what they thought would work, and then hoped that it did. The marketing teams largely focused on buying other media to promote the content. This was changed entirely. It was decided to run Mirchi as an FMCG brand. It started by defining the brand’s identity (youthful, energetic, vibrant, colourful, sunshine), the target audience (18-25-year-old male/female, aspiring for bigger things in life), the brand’s personality (cool, confident, not trying to impress), the right packaging wrappers (vibrant colours, witty temperament) and the tone (liberal, progressive, irreverent).

  Just like any FMCG brand would do, the revenue opportunity in each market was examined before finalizing the ‘format’ of the station and then came the content.

  Mirchi was also one of the early companies to have started the whole culture of research in media. Mirchi started pre-launch usage and attitude (U&A) studies—lifestyle, entertainment, pastime (LEP)—which played a key role in shaping the content and programming strategy for each city.

  Early programming that gave the brand the gloss

  Starting off with a catchy jingle, innovative ‘sparklers’ (creative capsules), international-standards packaging, clever radio jockeys and a slick flow of widely researched songs, Mirchi quickly went on to break new ground.

  Adding the glam quotient to spice up this erstwhile sarkari medium

  One of the pioneering things Mirchi was able to accomplish, clearly using the clout of the Times Group, was to have every single station inaugurated by a film star. So Ahmedabad, which followed Indore, was inaugurated by Sonali Bendre; Mumbai by Aishwarya Rai; and Pune by Amisha Patel. The following year, Delhi was launched by Kareena Kapoor and Kolkata by Bipasha Basu. Much later, in 2006, John Abraham launched Bangalore, Vidya Balan, Jaipur and so on. The instant connect with Bollywood, the widespread media coverage, the glitzy launches…all went on to make a ‘dead’ medium come alive.

  Establishing 98.3 as the frequency to remember

  The Kismat Khol De (KKD) contest was a simple one. It tried to establish 98.3 as the frequency to remember. Anyone who had the numbers 9, 8 and 3 (in any order) in a whole series of items, taken one day at a time, was eligible for participation. For example, on one day, if your life insurance policy had these numbers, you could be one of the lucky winners. On another day, if your bus ticket had these numbers, it could get you some prizes. The participation in this contest was so extensive that it had to be stopped for a day just a day after it was launched, and restarted only after a much bigger call centre was put in place to handle the call traffic.

  Funky contest communication

  Adding spice to traditional marketing the Mirchi way…

  Equipped with an evocative tagline, advertising and promotion campaigns made it cool to be caught listening to the ‘humble’ radio. The hoardings all around Mumbai, witty print ads, bizarre on-ground activations (people standing on the road in ice-buckets under Mumbai’s May sun!) and of course consumer contests and film-star launches all added to the frenzy around Mirchi.

  One of the early direct mailers to media agency heads was a big-sized TV box which many refused to accept, thinking Mirchi was trying to bribe them! Till they opened it, and saw a tiny TV set inside…the message blaring out loud that: ‘TV has shrunk and radio is bigger than TV’. The idea was that radio’s listenership (for Mirchi, it was some 30 odd lakh in Mumbai then) was comparable and comparing it with TV viewership of the No. 1 channel Star Plus (with a five minutes+filter), Mirchi numbers were actually bigger!

  Mirchi activations: An idea ahead of its time

  Mirchi was among the first media houses to launch ‘non-traditional revenues’ (NTR) that were basically advertiser-funded on-ground events that Mirchi supported with on-air campaigns. Commercially savvy as it was, Mirchi realized there were more clients willing to give it money for on-ground events than for radio advertising. The first event itself was a roaring success with more than 80,000 people thronging stalls of consumer products, food, etc. that were promoted on-air. In those early days, Mirchi even ferried potential advertisers to these fairs…to show them how radio worked.

  The investors felt that such peripheral activities diluted the focus on core radio. However, the team convinced the investors that the strategic objective of these was to in fact strengthen the core radio proposition. This NTR initiative was later rebranded as ‘Mirchi Activations’. This was much before Martin Sorrell said activations would be the next big thing in media. Mirchi Activations was born in 2002–3, and now contributes between 10 and 12 per cent of Mirchi revenues. While all radio stations today do activations in some form or the other, Mirchi has a dominant share of that business.

  All these efforts paid off as early research indicated that people had taken to Mirchi like fish to water. Even though other stations had launched in Mumbai by then, Mirchi was consumed by some 80 per cent of listeners. Car research indicated that close to 75 per cent cars were tuned into radio and more than 50 per cent of those into Mirchi. Mirchi used these research reports (conducted by Indian Market Research Bureau) to educate media agencies that in turn appreciated this data.

  The second wave of FM radio privatization

  The next big opportunity for Mirchi came in 2006, when fresh auctions were conducted as part of ‘Phase-2’ reforms. The big change the government made was that it changed the licence fee structure from the fixed annual licence fee to a combination of a one-time entry fee (OTEF) and a small revenue-dependent annual licence fee. This one change made the radio industry not just viable but also lucrative. Post 2006, Mirchi never made reported any loss. (It had accumulated losses of ₹102 crore till 2006.)

  The auction method was also changed. From Indian Premier League (IPL)-style ‘ascending’ auctions, the ‘tendering’ format (one-step bid) was adopted. This was a tricky style of auctioning. One had to estimate the potential of the market, the bidding strategy of the competitors, and also plan financial resources carefully because bidding went region-wise and was staggered over five weeks. The team was clear about the stations it wanted (‘must haves’) and those that were ‘good to have’. It consciously ‘over-bid’ in Bangalore and Hyderabad, the must-haves, bid aggressively in other metros and state capitals and conservatively in the good-to-have ones. The success of the strategy was clear from the fact that Mirchi bagged all thirteen ‘A+ and A’ towns (20 lakh+ population towns). It also managed thirty-two of the next best towns with the only painful exceptions being Chandigarh and Kochi. Chandigarh’s loss was not as painful (bidding ₹8 crore odd, when the lower of two successful bidders bid ₹10 cro
re). But the Mirchi team felt really bad about losing Kochi which it lost by a mere ₹18 lakh after bidding ₹9.12 crore (lowest of three successful bids was ₹9.3 crore).

  Mirchi now had the best network and it has been the strength of this network that has powered the brand since 2006.

  While the parent, BCCL, was well capable of funding Mirchi’s growth, an initial public offering (IPO) was launched in 2006, with a vision to make Mirchi the gold standard in media. The listing was more to test the inherent strength of the business than to raise funds. The IPO was a huge success.

  Just before the IPO, as part of a global strategy shift, CDPQ exited from all Asian markets including India with healthy returns.

  By 2006, brand Mirchi had become a much-sought-after brand, even in markets where it didn’t have any presence. So when it launched in these new towns, it found consumers eagerly awaiting the launch. Before the launch, there were even stories of people coming to Mumbai and Delhi and taking back recordings of shows! Now they had their own Mirchi to listen to. Not surprisingly, the brand was readily accepted. Years later, in 2014, Mirchi remained the No. 1 brand in 22–24 of the 32 cities it operated in (Indian Readership Survey & Radio Audience Measurement) and a close No. 2 in 8 more.

  Mirchi continued to build on its successes year after year with new innovations and additions. By 2014, it was doing programming in ten languages (Hindi, Marathi, Gujarati, Konkani, Tamil, Telugu, Malayalam, Kannada, Bangla, Punjabi). It forayed into international markets with a presence in the UAE where it won the Best Radio Station Award twice in its first two years.

  Keeping pace with the emergence of digital, nine online stations were created on radiomirchi.com and Mirchi became the No. 1 radio brand on all forms of social media, with 1.8 million fans on Facebook, 25,000 followers on Twitter and 7 million+ views on YouTube (as on March 2014).

  For long spells, it has also been the No. 1 on the audio podcast business on itunes.

  The sounds of success

  Mirchi went on to win numerous awards including some truly remarkable Indian and international recognitions

  »Pitch-IMRB award for ‘media brand of the year’ (2008), ahead of The Times of India and Star Plus.

  »FICCI (Federation of Indian Chambers of Commerce and Industry) Frames ‘radio business of the year’ award, several years in a row.

  »Golden Pegasus award for corporate social responsibility (CSR) initiatives with the visually impaired.

  »Hundreds of RAPA (Radio and Television Advertising Practitioners’ Association of India) and IRF (Indian Radio Forum) awards.

  »International Radio Festival award.

  But none of these awards was as satisfying for Mirchi as the ones from its listeners. By 2014, nearly 37 million listeners were tuning into Mirchi every week (IRS), 25 per cent more than its nearest competitor that had fifteen more stations. Mirchi became the No. 1 brand in the top eight markets aggregated (IRS), the No. 1 brand in north, west, central and east India and No. 2 brand in south India.

  »As a ₹385 crore brand today, it is nearly 70 per cent bigger than its nearest competitor.

  »With a healthy EBITDA (earnings before interest, taxation, depreciation and amortization) of ₹125 crore and PAT (profit after tax) of ₹83 crore, Mirchi had cash-on-books of ₹440 crore to which it added ₹118 crore in just FY2014.

  There is still a lot of spice in the Mirchi story

  The brand is truly ready for Phase-3 when even more towns will open up, and there will be a distinct possibility of acquiring a second and even third licence in some of the bigger towns. While growing its footprint nationally, Mirchi hopes to offer alternate music formats in the bigger cities. Then there is the global market opportunity of non-resident Indians and persons of Indian origin waiting for Mirchi to come to their shores. And there is the whole exciting world of online radio and music where it can morph from an FM broadcaster to a digital broadcaster. With exciting opportunities like extending Mirchi into various youth areas and creating IPs around the Mirchi brand (like Mirchi Music Awards and Mirchi Top 20), the brand promises to stay hot for a long time to come.

  Mirchi’s advertising campaigns:

  Mirchi’s innovative advertising strategies, particularly in the initial few years after launch, played a key role in the brand truly catching the attention of listeners. These campaigns defined the brand. The ad campaigns can be divided into the following categories:

  A.Initial outdoor campaigns aimed at playing up the Mirchi name, visually dramatizing the ‘fire’.

  B.Building on the ‘hot’ theme to build curiosity around ‘something hot is coming your way’. Using props like the simple chilli with an antenna or a toaster with an antenna. Tabasco/grenade and playboy ads. The campaign line was ‘You like it hot. We play it that way’. ’Subsequent campaigns worked on ‘Its hot’ in more direct ways leveraging Bipasha Basu, Preity Zinta and Salman Khan.

  C.Establishing Mirchi as ‘aapka apna Bollywood radio station’—another significant strategic initiative considering that all of its content came from Bollywood.

  ‘Up close on Radio Mirchi’ was launched to position Mirchi as the listeners’ connect into Bollywood. Around this time, Mirchi was playing an average of 100 film-celebrity bytes/interviews every month. Competition was way behind.

  D.The RJ Hunt, the first talent hunt on radio.

  E.Eventually around 2007, as product parity started emerging between different radio brands, Mirchi decided to take the brand outside of the realm of the product and developed the ‘Mirchi sunne waale always khush’ campaign. This was designed to play up the ‘pep-up’ promise of the brand.

  There were many other brand campaigns run for the next few years. However, clearly the brand had been made in its early, formative years. It is that legacy that still holds Mirchi up.

  One last word

  The success of brand Mirchi is on account of many factors. But if there is one that stands out, it is the quality of its people—a bunch of aspirational go-getters, put together by A.P. Parigi, a maverick leader who came from the world of telecom. The earliest leaders were all brand aficionados, coming from diverse backgrounds. There was a banker-turned-jeweller, a paint-executive, an advertising guru, a techie with exceptional people skills, an entrepreneur born and raised in Gujju-land, and a moneymaking machine who was popularly called ‘milkman’ (he used to milk the clients in his earlier days!). Then there was the chief financial officer (CFO), who we often said could make an entertainment TV channel by merely pointing the camera at him, and an HR head who was so into emotional engagement with an often volatile bunch of youngsters that he often forgot to maintain even basic records. And behind all of these passionate leaders was Vineet Jain, the chairman and the visionary behind Radio Mirchi.

  ‘REAL’ SUCCESS

  To accomplish great things, we must not only act, but also dream; not only plan, but also believe.

  —Anatole France

  This is the story of a juice brand that emerged from the stable of a company manufacturing Ayurvedic products; it is the story of a brand that won the battle of public perception to emerge as the dominant player in the market.

  The opportunity

  In the mid-1990s, the freshly squeezed fruit juice market in India (home or local juice stalls) was more than 300 million litres annually. This literally translated into a whopping 150 crore glasses consumed annually or 40 odd lakh glasses daily. So fruit juice was not exactly an alien concept. What was alien, however, was the idea of packaged juices. It was a non-existent category. Amit Burman, vice chairman at Dabur India Ltd spotted this as an opportunity to take a strategic bet and create not just another product for Dabur, but a whole new category for the country.

  Dabur India had a history of thinking out of the box and developing innovative products emanating out of deep consumer understanding. In many cases, Dabur pre-empted demand and evoked new needs by introducing category-creating products like Chawanprash, Gulabari, Vatika and Hajmola. This visionary thinking
has been key to Dabur’s success as a leading Indian FMCG (fast-moving consumer goods) company. In this case, too, Amit Burman observed the sharp contrast between the easy availability of packaged juices overseas and their unavailability in India. This was what, in the summer of 1996, led to the birth of Real—India’s first completely natural, healthy, packaged fruit juice with no added preservatives that was soon to dominate the Indian juice market.

  Solving for multiple challenges: Brand equity, product fitment, branding, product, packaging, positioning

  Thinking back, it wasn’t an easy step for Dabur India, an Ayurvedic company with almost no equity in foods, to embark on a bold and ambitious journey and launch what would later become the dominant brand of juices in the Indian market.

  Many fundamental questions had to be addressed. Was the Indian consumer ready for packaged juices? Was the concept a mere imitation of the West? What would be the acceptance of this product from a company known for Ayurvedic products? And most importantly would consumers be ready to pay for what is traditionally associated with homemade or freshly made?

  The answers lay in going back to the basics of Dabur’s core business philosophy of comprehensively understanding consumer needs and designing innovative solutions.

  The whole concept of fruit juices revolved around freshness. Also, juice stalls facilitated out-of-home consumption, providing variety and convenience. To convince consumers that packaged juices were as good if not better than fresh juice was a mammoth task. The tangible proof of possible freshness lay in adopting the new tetrapack packaging technology instead of the traditional glass bottles that Indian consumers were used to for beverages. Early adoption of advanced packaging technology contributed to a premium image which tends to get decoded in the minds of consumers as better quality.