It is something that traditional marketers may not like to hear. The way marketing currently works and is delivered will have to take a U turn to be even relevant. All that and more insights emerged in a PRHUB interaction with Arun Sinha, winner of AMA Marketer of the Year in 2005 and currently the Head of Global Marketing at Pitney Bowes Inc., USA, a Fortune 500 firm.
What is so wrong with the marketing of today that you need to turn it on its’ head?
Right through the year I travel across the world talking to customers, competitors and marketers from diverse businesses. And what I hear concerns me and is the basis on which I made that statement. To me it seems as if the marketing function (and the universities that teach its fundamentals) somehow missed the millennium and just kept plugging along without recognizing that the world – particularly the business world – has changed radically. It reflects in the thinking that pervades marketers across the world who treat it as an isolated function or a saviour in times of crisis. Recently, the CMO of a large Fortune 500 company confided in me that he only spoke to his CEO when there was a problem. The rest of the time they co-existed in glorious silence. The CMO couldn’t see what the CEO could offer when it came to marketing; the CEO was above such things. It’s an unrealistic mindset. Besides, marketing the way it is done today is often detached from what today’s consumers really need, leading to a big and growing disconnect. To be frank, my fear is that the traditional marketing minds are making many more mistakes than these two.
Outline key factors that have driven this paradigm shift?
The first and foremost is the change in the consumer landscape. The smart and connected consumer of today knows far more. They google, log onto a blog, speak to a friend and get competitive information and voila, they know more about your brand than you do. And this category of customers are going to be disappointed by today’s marketing mantra of take a big advertising campaign out, pack some star value and get the word out. Knowledgeable they are, this kind of approach will actually result in the reverse. Make them feel disengaged with the brand and feel that the brand is treating them as uninformed when they actually know more.
Second, the world is today truly flat (as Tom Friedman famously said) and we are all members of the Flat Earth Society now. The advent of digital communication has made it increasingly easy for companies to compete in the world economy. Chindia, the vital new combined economic force of China and India, is setting the new agenda. Both China and India are racing to build businesses that can compete directly with Western companies and take business away from them. Their value proposition is very simple: Quality at comparatively lower prices. Can you beat that?
Let me share with you this. Recently I attended the board meeting of an Indian company through web conferencing. I anticipated mutual back-slapping as the previous year’s revenues were up 60%. I was startled when instead of celebrations there were recriminations. The management was disappointed with 60% growth (in the US, we would have had champagne flowing) and was keen to figure what had gone wrong! And the next year’s target was set at more than 100%. Though the meeting ended late (2.00 a.m. at Connecticut), I felt charged as if I was involved with something profound. The other example is the company I am involved here with – 24×7 Learning, which provides technology-leveraged training and now wants to expand overseas. The management team is very optimistic and believes that growing in the U.S. market can be achieved in a year’s time. Yes, I said one year.
What can companies and marketers do to address this new consumer and the changing landscape?
- The old trick of the trade was to push information. The new way is to understand customers and to segment the marketplace. Let me give you an empirical example. Earlier for 10 people you had to appeal to 200. With market segmentation, today for 10 people you reach out only to 12. What do you call that? Marketing that truly works??
- Medium is the way to get there. Multi-channel marketing is an approach that is worth driving into.
- The new wave of marketing is data driven. It is a combination of arts and science and is more tilted towards science. It includes understanding customer, delivery and closing of the loop.
- Marketing in the new millennium needs to encompass a full circle from mining minds (Understand consumer’s wants, needs and aspirations), demarcating demand (How to create demand) to managing your brand, leadership and employees. The last part is important. Marketing is as much internal as it is external. You need to address employees as well.
What differentiates global brands that succeed and not succeed in the Indian market?
Let me first admit one thing. Multinationals (most of them with few exceptions) have not figured fully markets like India. Having said that let me outline a few aspects that are important for them to succeed in the Indian market:
- Have a long-term strategy to sustain (like what Motorola did in China-loose money for the first few years and today it is among the company’s fastest growing operations)
- Understand local sensitivities (cultural and otherwise)
- Shape the market by introducing approaches that are indigenous to India — but which can then be leveraged in other countries. Hindustan Lever is a good example. It introduced single-use sachets of shampoos and soap products so that lower-income customers have access to premium brands which led to growth of the category itself.
- Tweak the brands or have the global brand served as a local one. (Let me give you two examples. Most Indians don’t eat beef, so McDonald’s decided to create the McAloo Tikki burger, made of potatoes, which now has the highest sales in McDonald’s restaurants in India. Similarly, Pizza Hut’s Tandoori Pizza has helped store traffic grow fourfold and cash registers ring overtime)
- Understand distribution channels and how they work here
- Be genuine
To me, one of the biggest mistakes global companies make is for the senior executives to make an investment commitment without thinking through the horizon for return on investment. Frankly, with the economy so buoyant, it is very tempting to do that. But the results of the promise not being kept are disastrous.
What about Indian brands becoming truly global brands?
India is already building global brands in the area of IT services (Wipro, TCS and Infosys), pharmaceuticals (Ranbaxy and Dr.Reddy’s), automotive components and to some extent specialty chemicals. My gut feel is that it should continue to strive to build global brands in certain areas where it has natural strengths and the early lead. It is still a long way before you can see a truly global Indian brand in other categories, particularly consumer. If you have succeeded in the Indian marketplace and built a great brand, there is no market in the world which is out of bounds.
While Indians have broken the ceiling in many areas globally, the same is not true of marketing and branding arena. Why?
Right now in the US, I can only recall a few other names who head the global marketing of a Fortune 500 firm. Hence, the question is enormously relevant. There are two fundamental factors that have led to this:
- Indian education is still excessively focused on individual contribution while marketing as a discipline is about collective work. There is a basic disconnect there
- The society still prefers engineering and medical when it comes to education and career streams; there is a little whisper of a change and it would be a while before it becomes a storm
I hope it happens and we replicate our success in many other fields to marketing and branding as well.