Winning in India

Great Article on:

• How LG and Samsung have registered wins in the Indian Market.
• How a premium segment player is moving to touch the masses and how the volume driven company is moving to be an aspirational brand.
• Innovation : The key to success. What we have been reading all around comes with this practical example in localized market.
• Channelizing correctly and the sustaining your customers to stay strong in the market.

http://knowledge.wharton.upenn.edu/india/article.cfm?articleid=4338

What Nokia did in India was great , what these Korean duo are doing is phenomenal too.

Remember the Bi-Cycle ?

No I am not referring to any scientific cycle over here, it’s the same two wheels, which we loved to ride when we were young. Here in India its the first love of most of the kids and this doesn’t stop here for rural India it is the integral part of personal transport system, its the supply chain vehicle for Milk-Men in our country, the post-men spend their lives with this magnificent piece of work (for the record, Indian Postal System records one of the highest names in accuracy).
Do you remember the brand? I can bet 9 out of 10 people reading this would jump out with the name "HERO".

Yes, the very "HERO" brand of this country, which brought in the motorbikes with a storm and overtook the market.

Wait a minute from Bi-Cycles to Motorbikes isn’t it moving away from the core? Isn’t that been registered as the most dangerous move that an organization can make?
Well, yes it is. "Hero" did move from the core to shift to an adjacency.

One of the most vital reasons for their success is the bicycle market that they had created for themselves. It created the strongest "footprint" in the core of the market, the heart of the Indian consumer.
* Strong customer loyalty and brand respect will help you move from the core.

India has grown to a level that a motorbike is affordable to a generous number of people in rural India. Still, Hero didn’t dump their bicycle business, not for the reason of sentiments but for the fact that it is one product that will sell across the wide spectrum of customers spanning from farmers to professionals, from students to shopkeepers. Hero has been successful in coming up with great variants of bicycles at the right times to cater the need of all the consumers so far.
* Effective Market Segmentation and Market Surveys will help you cater a larger audience to your product and will ensure the ROI you are looking at.

Go around the city or a town or a nor very rural area of the country the chance that you will find a Hero Dealer is 100% and the chance that you find a Hero Honda dealer is pretty decent too. They have been successful in creating a vast and reliable dealer network , reaching far and creating a greater respect for the brand.
* If you know the target audience you have to build your brand carefully around them. Make sure your channels to reach the customers are not just wide spread but strategically spread.

Hero Honda were phenomenal in past few decades when it brought in bikes ( they have a tough competition in the market now...but still they where the "First to Market" people ). With initial models doing great in market they moved to upper segment bringing in urban class bikes, which were doing well till Bajaj entered the market with the greatest card of all " Fuel Efficiency ". This is when they started working with Honda their Japanese partners to get in fuel-efficient bikes...
* You will definitely reap the benefits of being "First to Market" since you have set a standard, captured the customers, but this stays only till someone else doesn’t come in to raise the bar. If its not you, who is raising it, then you have a tough competition to catch up with. So investment in R&D guided with the appropriate Marketing inputs focused on what in future will the customer demand and a watchful eye on competition will keep you above the water.

A Lesson from the Wall Street

In the fiscal year just ended, Harvard paid its top five investment managers an average of more than $4 million. Each. Per year.
Have they been overpaid ? Just look a the investment managers on the same footing on Wall Street and you will say no , in fact they may as well have a right for a few more dollars.

One evident thing to it:
The massacre at Wall Street has shown one thing very clearly that "talent" + "effort" does not relate to "salary". Highly paid managers took down the backbone of the system with them. Why? Because the "talent" never showed up in learning from the mistakes and "effort" never showed up in forecasting what can go wrong and "integrity" ( for that case a virtue ) never showed up on communicating to the world what will go wrong.

The reason :
They were driven by the force of performance which will be a measure of their skills. When the market is good they are the gods and who wants to point the fingers at god in good times . And thats where they kept working "bring money home and no one asks you the questions", and then when thunder sounds we pray to god for safety and when continuous prayers don't get heard its then we start complaining about the "gods", but by then most of it is lost. So yes its not them just but also the system beneath them which is responsible for this financial bloodshed.

The Lesson :
Marketers are driven by the very force of performance of organization ( for the product /services etc. that they are responsible for ) and the performance of themselves, since that will be measure of their expertise. But before you are taken for a ride with just these goals. - Learn from your mistakes.
- You are winning now doesn't mean you stop their. Develop foresight and create the platform for your products/services in future, what i have learned is called "network" yourself for future.
- Have the courage to accept what can go wrong in your strategy if you can predict its good, if you didn't predict and now you are about to face it , don't throw a black curtain on it. Since it will show up anycase but if you throw a curtain , it will bring huge losses and if you prepare and accept it you may create a cushion of least damage both to the market and your organization.

Knowledge, foresight, courage will take you a long way as a marketer.

Innovating in Financial Meltdown

The first recession which my generation saw was that when the IT bubble had burst. There was chaos in the industry but IT was the one which was crumbling while most of the industries sat back taking the view from the window. It was like a rib of the rib-cage was fractured , which people knew will heal.

The second which my generation is seeing is extra-ordinary by all measures. Its the meltdown of the financial system across the world. The backbone has crumbled this time ..its not a rib but the vital element which holds the rib-cage has been shaken ( and seems to be fractured at multiple positions) badly.

Considering this , why should companies still focus on investing in R&D activities at steady pace. The reason lies not in today but in the past, the history has a lesson already written which we will have to re-visit. History speaks for itself how great companies of today ( GE , HP, Disney, Microsoft ) have emerged from the toughest financial times ever.

If we look across the literature available we have clear evidences that , some companies who continued to invest in innovating , even in the extremely difficult times, have gone ahead to re-define a successful business. How did they do it?

They realised the time scale gap which exists between an innovation and commercialization of it.
You innovate today, it will take lets assume may be 2 years before you go commercial on it and reap the profits of your R&D investments. So here is your chance to go ahead. When others may cut down their R&D spending we can keep ours at steady pace or even boost if we are cash rich.
Innovate on time and in the due course you take the technological wonder to market which is already shining bright coming out of the financial jitters.

Then is when the "First to Market" makes a whole lot of sense. You enter first, you raise the bar, you set the expectation of the customer. You are already ahead ( may be already a winner )of the competition.

Its a fact that delay will be the natural response to market uncertainty but companies that delay these investments will loose significant growth opportunities when the economy recovers.

The Depression-era economist Joseph Schumpeter emphasized the positive consequences of downturns: "the destruction of underperforming companies, the release of capital from dying sectors to new industries, and the movement of high-quality, skilled workers toward stronger employers. For companies with cash and ideas, history shows that downturns can provide enormous strategic opportunity"

Thought it has to be noted that R&D investments for innovation in the past during difficult financial times that the market saw is not universally wise today, so marketers are the key to let you recognize the emerging growth pockets fueling the growth of the business.

Google Goes Rural

Its the time when every organization is aspiring to touch human life off their work scopes to create a name for them in the socio-economic development of India.

GE does it with partnering with NGO's in fields of Energy ( Renewable Energy Sources ) to Finance ( Micro-Financing ), empowering the rural India to utilize the potential of their resources to the fullest and enabling the people to go and realize their self-dependence. ITC does it with its "e-choupal" enabling framers to increase their scope beyond local mandis and middlemen.

Now its Google the big boss of search engines has entered with its "Gram Panchayat Puruskar" initiative rewarding the innovations in governance happening across the villages in the country
http://www.google.org/ggpp.html.

What about the role of marketing in socio-economic development? The role/scope/evolution and value of marketing in the development process have been known to be a stimulus to economic development and that will be leveraged in socio-economic sense also.

It will recognize the kind of resource development and management needed to explore the hidden opportunities in the local markets, in turn driving the localized labor/industries to achieve maximum benefits of such initiatives. It will focus its attention to the economic, social, cultural, commercial and technological environments in which the initiative will operate. The role of local populations and the impact of industrial development upon them will be a vital piece of information to expand the horizons of a business market scope.

High Ceilings and The Road-Side Vendor

One thing which holds true in the sense of urban lifestyle is that the trust on a commercial outlet ( ex: A Clothing Shop or A Bank ) seems to directly proportional to the ambiance and big advertisements which the company shells out to the end users.

I was travelling my way back to the city which i work, which happens to be 2500 kms from my home town , the train which i was reserved to travel on had all its coaches exteriors painted with the big advertisements of one of the largest communication companies in India. This didn't end with it, the coaches inside had been refurbished with internal AD holders and Wi-Fi connectivity. Certainly a big spending has been done by the company to be able to paint costliest long distance train of one of the worlds largest Railway System.

Now let me post a few questions for you to ponder

1. Why do companies spend so much on publicity when we cant imagine an immediate long term benefit that this may give them?
2. Why do companies spend a big deal on the ambiance of the outlets?
3. Why do companies sign player like "Sachin Tendulkar" ?
4. Why do companies associate themselves with the biggest movie stars?

When the companies create and buy big Advertisements Slots and Publicity Positions, spend millions in creating the most visibly enchanting outlets , sponsor "millions" on Bollywood awards and the biggest Cricket Series, what they are doing is called as Seth says "An Organized Waste". Why because this waste is what gets them to crawl in the mind of the users of the product. Most importantly it helps them to communicate the confidence of the brand/product.

Now in tough times like these is when the companies may reap the benefit of the big-spending that they have made , since we the "urban" and "semi-urban" people in India feel safe to be doing business or be associated with the brands which have a significant amount of "Organized Waste" in their kitty.

Now in the context of India, let me modify my starting statement and say that the "initial trust" is what gets influenced the most. The reason that i say this is , though the communication company may have spent millions on painting the train "red" but what happens to the spending when it comes to customer response centers. This i can easily generalize for most of the Indian companies ....they have got half the lesson on how "Organized Waste" works.... if you need customer loyalty and for that cause more customers what you need to have is people who take their time in answering your queries and keep their promises, people who carry with them a sense of respect for the customer. Big Sponsorships get you a TV Channel Slot for 1 hour award playback but it may not get you what is called as an intrusion into the new customer base or for that case any increase what so ever in the existing customer loyalty.

A point worth mentioning " The Road-Side Vendor " still exists in rural india and presents an entirely different aspect which we shall discuss later sometime......

Reviving The New TV With Old Ads

The part that i love the most to watch when i am channel surfing is undoubtedly the advertisements which float across to create the brand and the product awareness to the end users.
During my recent surfing expeditions i have met with the advertisements which i remember from my childhood...i am talking 15 years back from now.
I may not have a correct reason as to why they have re-appeared, but there are a few thoughts around it which i can weave to reason out things....

1. With the financials getting hit across the globe..companies may / will significantly cut there marketing/advertising budget ( Though not a good long term strategy...but that's a separate topic i may write about later ). A few of them , who can still sustain the channel bandwidth cost , will cut in terms of creating and posting the new ads across the channels may as well go back to the legendary old ads, the jingles of which still resides in the mind of about 2 or 3 generations of families now. So they are still in market and seen on TV.

2. Why do customers still love some products over others, even after years they have been associated with that particular brand and product, even though they have a large number of other brands and products available to them? One of the factors by which the customer loyalty is influenced, is by how the value of the product was conveyed to the customer when the product was launched. Of the several aspects , advertisements strike the mark substantially. So it may be an effort to bring in those old "good luck" :) advertisements back on the floor and revive the customer loyalty.... if these ads where able to make waves back in those years they can make waves in these years too....but the sea is different....its playing over the sea of existent customers and making them realize what the product value was in the past ...remains the same or may be more today..but no way less.....

For the newer generation of customers, i think these ads still strike the cord and does make much younger kids ..stop for a while on the channels and guess what..the next day you can find the jingle is as well known 15 years after it was created across the generation of customers as it was known when it was created.....what more do you want from an AD :)...a new singing customer i guess