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Marketing Strategies of Bollywood Movies in India and Overseas: An Empirical Study

P Prasada Rao* and Karthik Kannan**

This paper empirically proves how marketing has a definite impact on the returns of Bollywood movies made by the Hindi film industry. The different marketing channels, which can be used to create not just awareness but also increase the saleability of the finished product, have been aptly discussed in the article to carry it forward. Based on the empirical evidences an apt conclusion has also been drawn at the end of this research. The research tries to classify the movies taken up for the sample study based on their content and other promotional channels used.

Introduction
What is the formula for successful movies? What do the audiences want? How do movies manage to keep the cash register ringing? These are the questions which have existed in the art of filmmaking since ages. There are no definite answers to them, though there are formulas which have been reasonably figured out by successful directors in the different eras of filmmaking. There have been tried and tested formulas which have focused on friendship, marriage, divorce, sentiments and so on. Intelligent movie-makers have tried to play safe by sticking to such formulas in the respective periods of filmmaking. There have been mavericks as well who have constantly experimented with bold and new themes. They have created a new niche for themselves as well as for the rest. Cinema watching has never been the same. Gone are the days when a good movie was made, it was the content and story line, the strong performances which automatically drew the audience to the cinema theatres. The options of entertainment for the theatre-goer of the 1970s and the 1980s was relatively less. It was cinema which offered a valuable three-hour entertainment. The number of movies that were churned out of film factories were also comparatively less than the present era. Hence, the success of a movie purely depended on the content of the cinema. Technology has changed the very form of entertainmentvideo games to computers, cable television to video players, CDs to DVDs, i-pod to video mobile phones. The list is bound to become wider in the years to come. Grey market has also expanded and eroded into the profits of producers and distributors. This has added to the burden that a movie-maker has to face in order to earn revenue out of the movie that he/she produces.
* **

Faculty Member, Icfai Business School, Hyderabad, India. E-mail: uddu2001@yahoo.co.in Student, Icfai Business School, Hyderabad, India. E-mail: kannan_karthik@yahoo.com

2008 The Icfai University Press. All Rights Reserved.


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Marketing: Is It the Panacea That Movie Makers Have Been Waiting For? The playground is highly competitive; stakes are high and so is the challenge. In such a complex environment, the movie houses have to rely on an external tool to deliver value proposition to the end user. This is where marketing enters into the art of cinema. Today, every single entity is marketed starting from toilet soaps to luxury cars, educational institutions to sports and games, railways to airways. Nothing can survive today without marketing, as even countries are marketed. A billion dollar industry like cinema is no exception, and would need it all the more, as so many lives depend on it. Marketing of a movie can be classified into pre-release, release date and post-release. Pre-release would encompass things that have to be done by the production company. It includes music release, promotion in various forms of media starting from newspapers in the form of pictures, interviews, gossips, to televisions in the form of trailers, playing songs, making of the movie, interviews by the cast of the movie, and other activities which creates a buzz about the movie and is more than just awareness. The release date is equally important when the production houses normally tie up with the critics and the media to get the vital review right that sets the tone for the opening week and the days which follow for the ringing of the cash registers. The cast, themselves, make it a point to go to the theatre for further promotion. The movie is also played to others in the film fraternity in order to derive more positive energy. The post-release marketing is the most significant one, since the content and the result of the movie is out, and has been widely scrutinized. A positive feeling about the movie going rounds makes it all the more important to make it stay that way. Curiosity marketing, Mobile marketing, Viral marketing, Mass marketing, Buzz marketing, Lifestyle marketing, Co-branded marketing are some of the methodologies used by the companies to enhance the brand equity of the movies and to keep the money inflow on a continuous and a sustainable basis. Movies make a big opening purely because of the star-value and normally die out after the initial buzz fizzles out. It is this rate of decline that has to be checked by marketing campaigns. The television media becomes handy, as more and more promos are screened to increase the enthusiasm of the audience. For example, contests and competitions are run to ensure that the movie being talked about; smss are sent even by the actors themselves and mobile interactions are made possible; star lunches and fashion shows are run to add more glitz and glamor; in certain cases controversies are even cooked up to keep the buzz alive and kicking; blog sites are run so that positive vibes about the movie continue to circulate. Besides these many other activities are also taken up to hold the movie in theatres and ensure box office collections.

Aim of the Study


The objective of this study is as follows: Does there exist a significant relationship between marketing and box office returns? To what extent, can marketing have an impact on the ultimate outcome of the movie? What are the promotional tools that the movie-makers can invest in to generate higher returns from the movies?
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To what extent, do these individual channels have an impact on the ultimate return of movies?

Methodology
The study is based on secondary research. A Regression Analysis is performed on the data obtained, using EViews software. The steps followed are: The sample of movies used for the study has been listed which, ranges from a period of 2000-2006. Specifically this period has been chosen, as any movie taken before this period would widely vary in terms of its promotion, primarily due to technology. The box office returns1 (used to classify the hit status of the movies) and the return multiplier2 (used as the dependent variable in the regression equation) are computed based on the sales returns and budget spent after adjusting them to the current prices i.e., 2006, as per the research study using the inflation index. The independent variable contains the various marketing avenues used by the movies taken in the sample. The regression analysis is then performed and the output is interpreted.

Analysis
Tables 1 and 2 show the movie sample list and the data used for the Regression Analysis.
Table 1: Movie Sample List
Movie name Veer Zaara Lage Raho Munnabhai Bunty aur Babli Kaho Na Pyaar Hai Krrish Golmaal Sarkar 36 China Town Black Kabhi Alvida Na Kehna Dhoom Koi Mil Gaya Lagaan Mangal Pandey Devdas
1

Ret. Mult. 2.212180200 7.599166667 4.020741938 2.629768557 2.230222222 2.001333333 1.892342425 1.839333333 1.717809131 1.698333333 1.635152786 1.452577217 1.343085561 1.190856871 1.157371252

D_Internet 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1

D_Mobile 1 1 1 0 1 0 1 0 1 0 0 1 1 1 0 0

D_Games D_Viral Curosity 0 1 0 0 1 0 0 0 0 0 0 0 1 0 0 0 0 1 1 0 1 0 0 0 0 1 1 0 1 0 0 0 (Contd...)

Kabhi Kushi Kabhi Gham 2.113109963

Box Office returns Return on Investment = (Adjusted Inflationary Returns Adjusted Inflationary Budget)/ (Adjusted Inflationary Budget) * 100 Adjusted Inflationary Returns = Returns in India + Returns Overseas. Return Multiplier Box office return multiplier = Box Office Returns/Total Budget of the movie.

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Table 1: Movie Sample List


Movie name Lakshya Kaante The Hero Asoka Chalte Chalte Dhoom 2 Swades Chameli Naksha No Entry Salaam Namaste Tango Charlie Hanuman Animation Munnabhai MBBS Ret. Mult. 0.971035161 0.959734548 0.522165443 0.986262857 2.226060054 2.196969697 0.818897874 0.937621832 0.835333333 2.300752007 3.762668919 0.711267606 2.220064725 2.638135593 D_Internet 1 1 0 1 1 1 1 0 1 1 1 1 1 1 D_Mobile 0 1 0 0 1 1 1 0 0 0 1 0 1 1

(...contd) D_Games D_Viral Curosity 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 1 1 1 0 1 1 0 1 1

Table 2: Data for Regression Analysis


D_Cast 1 1 1 0 0 1 1 1 1 0 1 0 0 0 0 1 0 1 0 0 0 1 0 D_Remix 1 1 1 1 0 1 1 0 1 0 1 1 0 0 0 0 0 0 0 0 0 1 0 D_Sequel 0 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 D_Music 1 1 1 1 1 1 0 0 1 0 1 1 0 1 0 0 0 0 0 1 1 1 1 D_Buzz 1 1 0 1 1 1 0 1 0 0 0 1 0 1 0 0 0 0 0 0 1 1 0 D_Lifestyle 0 0 1 1 1 1 0 0 0 0 1 1 0 0 0 0 0 0 0 0 1 1 0 Total Sum 6 9 7 5 8 6 4 3 5 2 6 6 4 4 1 2 1 3 0 3 5 10 4 (Contd...)

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Table 2: Data for Regression Analysis


D_CAST 0 0 1 0 1 0 1 D_Remix 0 0 1 1 0 0 1 D_Sequel 0 0 0 0 0 1 0 D_Music 0 0 1 1 0 0 1 D_Buzz 0 0 1 0 0 1 1 D_Lifestyle 0 0 0 1 0 0 0

(...contd) Total Sum 1 1 6 6 2 5 7

Regression Equation 1
R m = Sd where Rm = Return Multiplier and Sd = Sum of the number of marketing channels used for each movie.

Output of Regression Equation 1


The output of Regression Analysis has a lot of statistical measures, but the most significant statistical output which provides a lot of meaning to the study is as follows: Prob. = 0.0000 (Significance Value) An acceptable level of significance is any value which is less than 0.05, and since, the significance value is 0.0000, it is considered to be a good value of significance. Thus, it can be concluded that there is a definite correlation between the dependent variable i.e., the Box office multiplier and the independent variable i.e., the sum of all the marketing channels. Adjusted R-squared = 0.452517 This is the key output, as it denotes that 45.25% of the box office returns is explained by the number of marketing channels considered in the study. This explains the need of diverse channels for marketing to initiate better results. In short, the more the number of channels, the more the returns.

Regression Equation 2
Rm = D1 + D2 + D3 + D4 + D5 + D6 + D7 + D8 + D9 + D10 where Rm = Return Multiplier D1 = Dummy variable for the marketing channel using Viral and Curiosity (refer Table 1) D2 = Dummy variable for the marketing channel using Sequel D3 = Dummy variable for the marketing channel using Remix or Mash ups D4 = Dummy variable for the marketing channel using Music or Background score

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D5 = Dummy variable for the marketing channel using Mobiles D6 = Dummy variable for the marketing channel using Internet D7 = Dummy variable for the marketing channel using Games online or contests like raffle draws D8 = Dummy variable for the marketing channel using Cast or Star value D9 = Dummy variable for the marketing channel using Buzz and Hype D10 = Dummy variable for the marketing channel using Lifestyle As has been already said that the significance value is supposed to be less than 0.05, for a good significance, however, it is evident from Table 3 that except for the Remix channel not a single value is close to 0.05.
Table 3: Output of Regression Equation 2
Variable D_VIRAL_CUROSITY D_SEQUEL D_REMIX D_MUSIC D_MOBILE D_LIFESTYLE D_INTERNET D_GAMES D_CAST D_BUZZ Prob. 0.5153 0.3306 0.0565 0.9552 0.7833 0.6151 0.6673 0.6119 0.9369 0.7360

There could be two reasons for the above results: a) Taking the result which are free of errors, one can conclude that the individual marketing channels actually do not have any necessary impact which determine the results by itself. b) Additional data like marketing budget spent in figures would be required to prove the desired impact that these marketing channels actually have on the box office returns. Of the above two conclusions, the second looks more likely because of the output of Regression Equation 1, where it has been proved with absolute significance that there is a definite correlation between marketing channels and box office returns. This was primarily because of the data that was used for the first equation which was quantified into specific values to compute the return multiplier. The independent variable considered was simply the sum total of channels used which was also available in tangible measures. Hence, one has to accept the second reason that it is the quantification which is required to understand the individual impact of these marketing channels on the box office returns. Adjusted R-squared = 0.321467
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This would mean that 32.15% of the 45.25% (Adjusted R-square of Equation 1) is explained by these individual channels. In short, out of the 45.25% of the returns which was explained by the marketing channel sum, 32.15% is explained by the number of individual channels i.e., Mobile, Cast etc. So, this further proves that if more diverse channels were to be considered, then the returns could be better. However, this output cannot be read in isolation since, it has been just said that the probabilities are not significant enough.

Findings
The movies taken in the sample are categorized under four broad categories and an attempt is made to understand them based on the statistical output that has been derived. The four categories are : 1. High on Content and Aggressive Promotion 2. Low on Content and Aggressive Promotion 3. High on Content and Low on Promotion 4. Low on Content and Low on Promotion The movies in Table 4 have cashed at the box office only because of the strong content in them. The classic example is Lage Raho Munnabhai that has worked like magic at the box office and has given the movie-makers a return of nearly 660%. The movie innovatively brings in an age old concept and effectively communicates and reaches audience of all ages. This is the kind of magic formula that a movie-maker needs to follow:
Table 4: High on Content and Aggressive Promotion
S. No. 1 2 3 4 5 6 7 8 9 Movie Name Lage Raho Munnabhai Salaam Namaste Munnabhai MBBS Kaho Na Pyaar Hai Chalte Chalte Hanuman Animation Veer Zaara Kabhi Kushi Kabhi Gham Kabhi Alvida Na Kehna Content Y Y Y Y Y Y Y Y Y Promotion Level Promotion Level 9 6 7 5 5 5 6 6 6 Very Aggressive Aggressive Aggressive Aggressive Aggressive Aggressive Aggressive Aggressive Aggressive Status All time Blockbuster Blockbuster Blockbuster Blockbuster Blockbuster Blockbuster Blockbuster Blockbuster Super Hit

Appealing Content + Aggressive Marketing = All Time Blockbuster Next comes the most interesting segment. In spite of being low on content there are some movies which do extremely well at the box office. A classic example here could be that of Dhoom2 where one should admit that there was no story line. However, in terms of promotion nothing was left unturned. They cashed in on the big stars, lifestyle, music as represented in Table 5, and used all the possible channels, while the producers laughed their way to the bank. There are movies like Krrish where all the hype is generated prior
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to the release of the movie to rake in the moolah in that crucial opening week and break even. Sustainability is attained by marketing efforts on an ongoing basis.
Table 5: Low on Content and Aggressive Promotion
S. No. 10 11 12 13 14 15 Movie Name Bunty aur Babli No Entry Krrish Dhoom2 36 China Town Dhoom Content N N N N N N Promotion Level 7 6 8 10 5 6 Promotion Level Aggressive Aggressive Very Aggressive Very Aggressive Aggressive Aggressive Status Blockbuster Blockbuster Blockbuster Blockbuster Super Hit Super Hit

Table 6 represents a significant area where producers are getting it wrong. Having the content is like more than half the job done, but missing on the marketing efforts is like not closing in on the sale. In todays world, a customer gets to see a well-made pirated print of the movie sitting comfortably at his home. CDs, DVDs, MP3s and other forms of the art technologies have become competitors to the movie industry. If one has to draw oneself to the theatres then the buzz has to be created. A classic example is Swades; while critics and people who saw it gave a positive rating, it still turned out to be a flop. Why? More could have been done and the product could have been sold better.
Table 6: High on Content and Low on Promotion
S. No. Movie Name Content Promotion Level Promotion Level Status

16 17 18 19 20 21 22 23 24 25

Sarkar Black Koi Mil Gaya Lagaan Mangal Pandey Devdas Asoka Lakshya Chameli Swades

Y Y Y Y Y Y Y Y Y Y

3 2 4 4 1 2 3 3 1 4

Moderate Moderate Moderate Moderate Not Adequate Moderate Moderate Moderate Not Adequate Moderate

Super Hit Super Hit Hit Hit Hit Hit Flop Flop Flop Flop

The last category is Low on Content and Low on Promotion (see Table 7), which is normally written off; but there is still an exception and that is Golmaal. This was primarily because of the miniscule budget of the movie, and the fact that comedy was the genre of the time when the movie was released also contributed to the movies success. Here, special mention needs to be made about the movie The Hero; though the budget for the movie is one of the highest in the Hindi film industry, without adequate promotion, it turned out to be a no grosser. Movies that are low on content can take their cue from a movie like Dhoom 2 which cashed on not only at the all important opening week but was also sustained by marketing efforts which helped to rake in the moolah.
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Table 7: Low on Content and Low on Promotion


S. No. Movie Name Content Promotion Level Promotion Level Status

26 27 28 29 30

Golmaal Kaante Naksha Tango Charlie The Hero

N N N N N

4 3 2 2 1

Moderate Moderate Not Adequate Moderate Not Adequate

Blockbuster Flop Flop Flop Flop

Another example is Lage Raho Munnabhai, which took the risk of advocating the age-old concept of Gandhianism especially to advocate a concept that is more than ridiculed in the current age. Making a movie on top of that is almost like taking sleeping pills. The beauty of the movie lay in the way it was stylishly packaged so that it could reach today's customers in the form of Munnabhai and Circuit who in their own slapstick way proved to be the major attraction. This was sufficiently backed by good marketing as sufficient buzz was created at all levels as to how Gandhigiri was made relevant to present day lives. This truly serves as a benchmark. So, the recipe is to take not just a good story line but also make it appealing so that it reaches the audience of today, and sell it to them with sufficient promotional tools. There is no reason why they should not buy it. And that is how successful movies are made.

Conclusion and Future Implications


Let us take a look at the future implications and plausible research for this project. This project, nevertheless with all the limitations, is definitely a start and first of its kind in the area of movie business. With better resources this can be performed with precision and used as a Bible for Return on Investments in the Entertainment Business. Along with increasing the sample what could also be taken into account is the diversification of more channels. Blog is one channel that is beginning to be accepted as a part and parcel of the society. This area could be utilized specifically by movie-makers for promoting the movies further. This would also include taking the views of movie critics, actively promoting their views and rubbing them onto the final consumers. For example, when there is a movie (like Swades) which has good content, it is important to ensure that people become aware of it and take adequate interest in the movie. Today, there are movie critics appearing on almost every TV channel. For example, people like Rajeev Masand definitely create an impact on the minds of the viewers when they give a verdict on channels like CNN-IBN. It is important that movie makers take these mega mavens into confidence. However, this is not to be done by buying or recruiting them as such. If done so, these professionals might lose their own credibility. In the US, there are people like Oprah who create a major impact on the sales of a book when they recommend it. Such a concept should be adopted in the Indian film industry as well. If there are people whom one can trust and who recommend something more than just the person who is associated with the movie, then the believability level increases as one has already attached a certain amount of credibility level to such mavens.
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This concept is further extended to blog sites where opinions are brought in by different pockets of society, where again the opinion of the leaders matter the most. The opinion leaders have the ability to simply make people like the movie (product). In this case, they push the people to go ahead and watch the movie on the big screen (cinema theatres). This in other words can also be called stealth marketing, which in the movie business can work effectively. Imagine a movie like Black, which has a number of popular blog sites, where the customers have such stealth marketers working for them. When the marketers propagate the movie by saying positive things about the movie, not just things like it is different (which anyway is talked about in the press release of almost every movie), but specific scenes such as how when Rani Mukherjee graduates he/she almost cried in the theatre; how remarkably the little girl in the movie performed, the customers tend to get interested in the movie. Another example, is the movie Guru, with a very good content but without sufficient promotional efforts; it could have seen the fate of films such as Swades or Paheli, but blogs were run in support of the movie and the movie critiques were also equally positive, and thus the movie has become a hit in India and super-hit in the western countries as well. Thus, this field offers enormous scope in terms of research which cannot be restricted to this project alone, which is only a beginning and when conducted with optimized resources can produce findings which will go a long way to understand the all important psyche of the human mind. If men are from Mars and women are from Venus, then as a movie maker one should be able to understand and speak both the Martian and Venusian languages!

Limitations
The study does contain certain limitations and hence cannot be interpreted in isolation without keeping the below in mind: The statistical interpretation of Regression Equation 2 as has been said earlier, becomes all the more relevant with the quantification of the marketing channels used as Independent variables. When concrete data is available, as to how much the production houses has spent on each marketing channel, this entire study gains more relevance. The data taken for the study: budget, returns, collections etc., are from online websites like Boxofficeindia.com, imdb.com and others. The authenticity of such websites is not tested and hence, if there is any wrong communication of figures then the entire study could fall apart. The data taken for the kind of marketing channels used by each movie are from general sites and as no concrete sites are available, there is a possibility that the searches undertaken for identifying marketing channels will not be complete. This, if found to be true, will change the outcome of the project to a great extent. The sample considered for the empirical study is the bare minimum for any statistical significance and i.e., 30. So, to get a better interpretation and to be used by people in the entertainment business, one should run the statistical analysis on a larger number of sample data.
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No research has been undertaken in selecting the sample of movies except that a time frame was fixed i.e., 2000 to 2006 so that the kind of marketing channels used will not be drastically different and the study will gain more relevance. However, while selecting a movie within the given time frame the selection has happened based on data availability of the budget and box office collections and not on any other criterion. There are two factors which require greater in-depth study than what is detailed in this project, to gain better relevance even before this could be published as a Bible for people in the entertainment business, i.e., a) Content and b) Consumer Behavior. Though the conclusion talks about movies with and without content, it does not undertake proper research into that area. The consumer behavior is a reference to the seasonality in the genre of movie and only a mention has been made in this article as to where more research is needed.

Websites
1. www.allbollywood.com 2. www.bollywoodmantra.com 3. www.boxofficeindia.com 4. www.business-standard.com 5. www.businessworld.com 6. www.caseplace.org 7. www.cinematical.com 8. www.entertainment.oneindia.in 9. www.glamsham.com 10. www.hungama.com 11. www.ibnlive.com 12. www.imdb.com 13. www.indiafm.com 14. www.indianmoviemart.com 15. www.knowledge@wharton.upenn.edu 16. www.marketingpower.com 17. www.mckinseyquarterly.com 18. www.mouthshut.com
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19. www.movieindustrymarketing.com 20. www.planetbollywood.com 21. www.sulekha.com 22. www.thehindubusinessline.com 23. www.timesofindia.indiatimes.com 24. www.wikipedia.org 25. www.yashrajfilms.com 26. www.youtube.com

Reference # 33J-2008-03-04-01

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