The story at the bottom of the pyramid
Rural India seems to be the latest flavour in town. From finance ministers to corporate India across industries, everyone seems to be shifting focus to the bottom of the pyramid. All boardroom discussions are getting centered on finding ways and means to grab a share of this lucrative pie. Rural development in India has witnessed several changes and has assumed a new dimension and perspective as a consequence.
Numbers look seductive with statistics and data giving enough evidence of volume potential…smaller ticket sizes but more buyers, making it eminent for most industries to ignore this segment at their own peril.
With near saturation and cutthroat competition in urban markets, there is almost no debate left on the potential of this burgeoning rural population whose incomes are rising and mindsets are changing.
While certain industries like FMCG have made early entry, others are learning the ropes with each passing day. Most industries are trying to test the waters through various forms of pilots and test launches with no clear indicators of gains in the short run. But there is no denying that the long term potential is vast, but so are the challenges.
Up until recently, a large part of marketing was done targeting the urban consumer and with most marketers having no prior exposure to the rural audience, they are applying the same rules to connect with this completely different segment. The mistake that most companies make while chalking their rural strategies is to treat the rural consumer as an extension of their urban counterpart.
The other common mistake is to treat rural consumers as a homogenous mass without segmenting them into appropriate segments.
The most relevant point to note is that this segment is extremely fragmented and spread out over a large geographical base. The cultural and behavioral differences vary not just from state to state but from village to village.
Mapping out this difference in consumer behavior is the key to any successful rural strategy.
A recent in sighting exercise in India’s villages has revealed some interesting trends
From buffaloes to beauty parlours:
Farmers verging on retirement, sensing the decline of their own profession, are encouraging their children to enter different vocations.
Around one fifth of rural households now generate their primary income from a salaried job or a small business. Besides of course small village shops, loans are being taken for novel business ideas like beauty parlours, popcorn machines, spice factories, tailoring shops etc.
A villager equals farmer is true no more as life has moved beyond farming and agriculture.
Don’t just sell dreams, tell them how to live their dreams:
Thanks to the television having made substantial inroads into rural homes, villagers have also learnt to dream. Everyday they are exposed to images of ordinary people scaling extra ordinary heights.
This has given them enough hope about their own future, but where they flounder is the way to go about it. It is here that measured approach consisting of small actions, one step at a time, finds better acceptance and credibility. Actions where outcome can be measured from time to time and results are visible in the near future. So go ahead and sell them dreams but at the same time give them a solution and a formula for it to materialize.
Not just economic but emotional security:
Even though they are receptive to new ideas, they do not readily dash into new ventures. They do not only want economic security but also want emotional security. They are likely to welcome innovation that satisfies their sense of security. If they feel that a particular idea will help them improve their economic position or their social relationship they will accept it.
Selling a product to them is not a cold commercial transaction it is an agreement of trust between the marketer and the consumer. And companies that live up to the trust that this consumer places in them, will benefit immensely in the long run.
Their children are like stocks in a portfolio:
Its always known that family ties are very strong in hinterland, but the difference is in the proportion of family budget that is being allocated to children, especially the male child and his education. Son’s education in a private school is like a stock market investment that is bound to yield returns far greater than any other investment. Any marketing effort that appeals to this agenda is bound to catch his immediate attention.
Sharing risks and rotating savings:
This insight is the basis for the success of all micro finance ventures in rural India. A simple model that lends on the back-up commitment of small groups has minimized risks and reduced bad debts to near zero percent. (Certainly doesn’t need the intervention of the finance minister to help institutions recover their money!!) Some of the other industries that can leverage this to their advantage are insurance schemes that offer group products and innovative saving schemes.
Community Empowerment and Inclusion:
The rural communities have not been empowered in the past. Therefore they do not participate in the development process. A participatory model that mobilizes the community and makes it responsible for its own well-being is bound to find greater success. The attempt should be to turn villagers into entrepreneurs and keep the ownership of the various projects with the community. Given the vastness and diversity of the geographies involved, marketers would do well to leverage the potential of villagers themselves by creating entrepreneurial communities. Make them an extended team of your business and let them grow with you.
A last word of caution, the companies entering the rural markets must do so for strategic reasons and not for tactical gains. The rural consumer is still a closed book and it is only through unwavering commitment that companies can hope to make a dent in this market.
Not to forget that it has to be a revolutionary and not just an evolutionary business approach that will open new frontiers of consumer demand and create an emerging market within a developing market.
Monday, May 19, 2008
Bollywood holds lessons for marketers
FANTASY, SPOOFS & NOW DYSLEXIA- INDIAN AUDIENCE HAS CERTAINLY MATURED
Amidst the prevalent notion of Hindi cinema being primarily for an audience too happy to celebrate stereotypes, the last year has certainly seen the canvas broadening and the scope widening. From animation and fantasies to a tongue –in-cheek satire on modern India. From an offbeat film on female bonding to the good old rip offs of Hollywood action thrillers- multiple genres are jostling for space on the Indian marquees.
The diversity of genres today span from stereotypes of escapist or popcorn entertainment to a more documentary like subject of dyslexia. Yes, we are referring to the likes of ‘Hey Baby’ & ‘Partner’ on one side and Aamir Khan’s directorial debut ‘Taare Zameen Par’ which tackles the extremely important yet neglected issue of children facing difficulties getting mainstream education.
Is there a lesson for marketers here? Is there a new insight into the consumption pattern of Indian audience?
The Hindi film industry has always been a barometer of various societal trends. There is a lot to be decoded from the box office records of movies. Hits and misses have a story to tell as they expose the prevalent emotions and predict new trends.
Bollywood has not been entirely without some of these experimental genres in the past. There was the wake-up call to youngsters in ‘Rang De Basanti’ or an extremely sensitive portrayal of a blind girl played in ‘Black’. But they were experiments at best, few and far in between. So there were the usual stereotypes and a few experiments in between for the discerning audience that also happened to do well at the box office.
But the difference today is that there is no set trend or pattern to follow. From the wonderfully spiced up spoofs in ‘OSO’ to the important metaphor of female expression in ‘Chak De’ to a simplistic rich boy, poor girl love story in ‘Jab We Met’ the Indian audience has an appetite for all of it.
What is re-assuring and comforting is the wide spread acceptance of it all that takes it out of the ‘niche’ and into the popular mainstream. The audience is in a more receptive frame of mind, appreciating and relishing myriad genres.
So it’s also the best time for Indian marketers to put on their thinking caps and induce some fresh and innovative thinking in their strategies.
The Indian audience is living in an era of ‘entertainment economy’. They are seeking out entertainment in every experience- shopping, eating out, official trips or even family bonding. And with two hundred plus TV channels beaming out various forms of content live into their drawing room every waking minute, they have certainly matured in their consumption pattern of entertainment. They are today able to clearly differentiate fact from fiction and appreciate various genres for their original worth. While in the same week they are able to enjoy ‘Welcome’ as ‘leave your brains as home’ entertainer, they are also happy to soak in a intense socially relevant subject of dyslexia that finds connect with the masses and critics alike.
Now that the audience is in a mellow, welcoming mood, this is the time to bring in new talent with fresh ideas. Marketers need to not only enhance the existing levels of creativity within advertising but also to do this through deploying promotional techniques that broke with the established conventions of above- the-line advertising. They also need to break free of established genres of TV advertising that positioned the 30 sec TV spot as the pre-eminent form of advertising.
With no set trend to follow marketers have to experiment and innovate to attract and entice the elusive audience. The definition of communication should change to include multi platform campaigns, in sourced infotainment, user generated content, customer friendly CRM programs and other activities rarely associated with traditional advertising. Marketing experimentation should accelerate along with the need for new metrics as communications cost barriers continue to plunge. There is a need for new capabilities among media, agencies & marketers.
For the film industry that strangely prefers to wallow in familiarity & stereotype the blockbuster success of these diverse genres should offer enough motivation to marketers to expand their arsenal & attempt wild ideas & creative innovations not just in their communication but also in business strategy.
Amidst the prevalent notion of Hindi cinema being primarily for an audience too happy to celebrate stereotypes, the last year has certainly seen the canvas broadening and the scope widening. From animation and fantasies to a tongue –in-cheek satire on modern India. From an offbeat film on female bonding to the good old rip offs of Hollywood action thrillers- multiple genres are jostling for space on the Indian marquees.
The diversity of genres today span from stereotypes of escapist or popcorn entertainment to a more documentary like subject of dyslexia. Yes, we are referring to the likes of ‘Hey Baby’ & ‘Partner’ on one side and Aamir Khan’s directorial debut ‘Taare Zameen Par’ which tackles the extremely important yet neglected issue of children facing difficulties getting mainstream education.
Is there a lesson for marketers here? Is there a new insight into the consumption pattern of Indian audience?
The Hindi film industry has always been a barometer of various societal trends. There is a lot to be decoded from the box office records of movies. Hits and misses have a story to tell as they expose the prevalent emotions and predict new trends.
Bollywood has not been entirely without some of these experimental genres in the past. There was the wake-up call to youngsters in ‘Rang De Basanti’ or an extremely sensitive portrayal of a blind girl played in ‘Black’. But they were experiments at best, few and far in between. So there were the usual stereotypes and a few experiments in between for the discerning audience that also happened to do well at the box office.
But the difference today is that there is no set trend or pattern to follow. From the wonderfully spiced up spoofs in ‘OSO’ to the important metaphor of female expression in ‘Chak De’ to a simplistic rich boy, poor girl love story in ‘Jab We Met’ the Indian audience has an appetite for all of it.
What is re-assuring and comforting is the wide spread acceptance of it all that takes it out of the ‘niche’ and into the popular mainstream. The audience is in a more receptive frame of mind, appreciating and relishing myriad genres.
So it’s also the best time for Indian marketers to put on their thinking caps and induce some fresh and innovative thinking in their strategies.
The Indian audience is living in an era of ‘entertainment economy’. They are seeking out entertainment in every experience- shopping, eating out, official trips or even family bonding. And with two hundred plus TV channels beaming out various forms of content live into their drawing room every waking minute, they have certainly matured in their consumption pattern of entertainment. They are today able to clearly differentiate fact from fiction and appreciate various genres for their original worth. While in the same week they are able to enjoy ‘Welcome’ as ‘leave your brains as home’ entertainer, they are also happy to soak in a intense socially relevant subject of dyslexia that finds connect with the masses and critics alike.
Now that the audience is in a mellow, welcoming mood, this is the time to bring in new talent with fresh ideas. Marketers need to not only enhance the existing levels of creativity within advertising but also to do this through deploying promotional techniques that broke with the established conventions of above- the-line advertising. They also need to break free of established genres of TV advertising that positioned the 30 sec TV spot as the pre-eminent form of advertising.
With no set trend to follow marketers have to experiment and innovate to attract and entice the elusive audience. The definition of communication should change to include multi platform campaigns, in sourced infotainment, user generated content, customer friendly CRM programs and other activities rarely associated with traditional advertising. Marketing experimentation should accelerate along with the need for new metrics as communications cost barriers continue to plunge. There is a need for new capabilities among media, agencies & marketers.
For the film industry that strangely prefers to wallow in familiarity & stereotype the blockbuster success of these diverse genres should offer enough motivation to marketers to expand their arsenal & attempt wild ideas & creative innovations not just in their communication but also in business strategy.
Tuesday, February 19, 2008
Marketing in Transitional Economies
An important aspect of globalization is the increased participation of developing economies in the global economy both as marketers and producers of goods and services. The increased integration in global economies has meant change in organizational landscapes as well, thus necessitating the organizational transformation to deal with new competitive dynamics. In this article, we examine the changing role of one of the most important and yet the most undermined function in business today – MARKETING.
Since the opening of the economy in India in 1991, the role of Marketing is marked by change, contradiction and confusion. In short, all the problems those are typically associated with a concept in transition. And for most parts marketers themselves are to be blamed for it. It is the fault of the function that has simply lost its bearings in this rapidly changing world.
To begin with, the role of Marketing has become very diffused and all-encompassing. And this trend is evident in all organizations around us. In some organizations, marketing equals communication and PR while in some others it includes product development and in yet some others, it just means distribution. In addition, the definition of Marketing has also been understood to mean various things such as promoting, selling, positioning, targeting, branding, innovating, and much more. It is this fluidity in the meaning of marketing that is both its source of power and its undoing--it can change rapidly to leverage changes in the business environment, but it can also become bogged down in dead-end paradigms that languish for years. Ironically, while one of the key deliverables for Marketing is the ‘positioning’ of products/companies, it has failed to sharply position itself as the dominant ethos of the firm.
In an increasingly globalized economy there are some basic fundamentals of marketing that need to be re-visited and re-iterated for it to become the strategic driver of growth in any organization.
Customer vs. Evangelist Approach:
Put the overall customer experience far ahead and at the helm of every strategic decision of the organization, be it product, price or distribution. Marketers need to be aware and on top of new buyer reality. The focus clearly needs to be customer-centric activities – customer service and delivery, easy access, post-purchase satisfaction and overall customer experience as the most critical aspect of their job ahead of tactics like advertising and promotion. The emphasis needs to be on offering solutions that aim towards creating loyalty and goodwill in the long run and thereby converting customers into evangelists. This would make their job far simpler as evangelists would become the spokespeople for the product and that too at no extra cost.
Brand vs. Business Approach:
Marketers need to ensure a deeper influence in the organization through better integrated business, brand and marketing strategy, in order for the business goals to be achieved. The myopic approach to brand building limited to advertising and promotions needs to be up scaled with a larger business perspective. And hence, all decisions related to products, pricing and brand portfolio strategies such as brand extensions, variant mixes, etc. should be aimed towards boosting revenues and driving growth.
Marketing vs. Selling:
Great products no longer are enough and strengthening the sales force is not the answer to sales growth. The solution lies in effectively marketing the product. Marketing must stimulate demand and create momentum for the brand. In a society of abundance marketers must serve a role keyed to excess supply rather than excess demand. In such a scenario it is easy to fall prey to day-to-day pressures of sales and resort to short term tactics that are counterproductive for long term brand health. Marketers are constantly challenged to demonstrate the fact that marketing is an objective and quantifiable function and most influential in delivering medium to long term results.
Cost vs. Investment Approach:
Investment in Marketing is quite often viewed as a “discretionary expense” – atleast more discretionary than other line items on the budget. Many companies focused on bottom lines argue that profits are most rapidly created through cost cutting and reduced marketing investments. That’s why at difficult times the first one to face the axe is always the marketing budget.
The reason for this is most marketers are not able to provide measurable returns on investment directly co-related to business growth. Marketing has to take the onus of a better understanding, creating and delivering on customer focused growth strategies that grow revenues while also improving returns on investment.
Marketers today need to evolve from the traditional approach to marketing which was governed by product, place, price and promotion. This tenet was driven by the needs of the business – a seller’s approach. This needs to shift to a buyers approach keeping customer needs at the centre of all marketing strategies.
Marketing must show its prowess in understanding and leveraging its knowledge of the customer and what motivates the customer’s relationship with the brand. Its marketing that brings the insights that must be leveraged across the customer touch points – whether they are owned by the sales team, customer service or business operations – to ensure the business attains and maintains its superiority.
To that end the marketing mantra needs to evolve to the 5 I’s for any marketer to be effective: A relevant Insight, A Powerful and Unique Idea, A Breakthrough Innovation, A 360 degree Implementation and A Seamless Integration. This will ensure success in today’s dynamic, competitive business landscape.
T
An important aspect of globalization is the increased participation of developing economies in the global economy both as marketers and producers of goods and services. The increased integration in global economies has meant change in organizational landscapes as well, thus necessitating the organizational transformation to deal with new competitive dynamics. In this article, we examine the changing role of one of the most important and yet the most undermined function in business today – MARKETING.
Since the opening of the economy in India in 1991, the role of Marketing is marked by change, contradiction and confusion. In short, all the problems those are typically associated with a concept in transition. And for most parts marketers themselves are to be blamed for it. It is the fault of the function that has simply lost its bearings in this rapidly changing world.
To begin with, the role of Marketing has become very diffused and all-encompassing. And this trend is evident in all organizations around us. In some organizations, marketing equals communication and PR while in some others it includes product development and in yet some others, it just means distribution. In addition, the definition of Marketing has also been understood to mean various things such as promoting, selling, positioning, targeting, branding, innovating, and much more. It is this fluidity in the meaning of marketing that is both its source of power and its undoing--it can change rapidly to leverage changes in the business environment, but it can also become bogged down in dead-end paradigms that languish for years. Ironically, while one of the key deliverables for Marketing is the ‘positioning’ of products/companies, it has failed to sharply position itself as the dominant ethos of the firm.
In an increasingly globalized economy there are some basic fundamentals of marketing that need to be re-visited and re-iterated for it to become the strategic driver of growth in any organization.
Customer vs. Evangelist Approach:
Put the overall customer experience far ahead and at the helm of every strategic decision of the organization, be it product, price or distribution. Marketers need to be aware and on top of new buyer reality. The focus clearly needs to be customer-centric activities – customer service and delivery, easy access, post-purchase satisfaction and overall customer experience as the most critical aspect of their job ahead of tactics like advertising and promotion. The emphasis needs to be on offering solutions that aim towards creating loyalty and goodwill in the long run and thereby converting customers into evangelists. This would make their job far simpler as evangelists would become the spokespeople for the product and that too at no extra cost.
Brand vs. Business Approach:
Marketers need to ensure a deeper influence in the organization through better integrated business, brand and marketing strategy, in order for the business goals to be achieved. The myopic approach to brand building limited to advertising and promotions needs to be up scaled with a larger business perspective. And hence, all decisions related to products, pricing and brand portfolio strategies such as brand extensions, variant mixes, etc. should be aimed towards boosting revenues and driving growth.
Marketing vs. Selling:
Great products no longer are enough and strengthening the sales force is not the answer to sales growth. The solution lies in effectively marketing the product. Marketing must stimulate demand and create momentum for the brand. In a society of abundance marketers must serve a role keyed to excess supply rather than excess demand. In such a scenario it is easy to fall prey to day-to-day pressures of sales and resort to short term tactics that are counterproductive for long term brand health. Marketers are constantly challenged to demonstrate the fact that marketing is an objective and quantifiable function and most influential in delivering medium to long term results.
Cost vs. Investment Approach:
Investment in Marketing is quite often viewed as a “discretionary expense” – atleast more discretionary than other line items on the budget. Many companies focused on bottom lines argue that profits are most rapidly created through cost cutting and reduced marketing investments. That’s why at difficult times the first one to face the axe is always the marketing budget.
The reason for this is most marketers are not able to provide measurable returns on investment directly co-related to business growth. Marketing has to take the onus of a better understanding, creating and delivering on customer focused growth strategies that grow revenues while also improving returns on investment.
Marketers today need to evolve from the traditional approach to marketing which was governed by product, place, price and promotion. This tenet was driven by the needs of the business – a seller’s approach. This needs to shift to a buyers approach keeping customer needs at the centre of all marketing strategies.
Marketing must show its prowess in understanding and leveraging its knowledge of the customer and what motivates the customer’s relationship with the brand. Its marketing that brings the insights that must be leveraged across the customer touch points – whether they are owned by the sales team, customer service or business operations – to ensure the business attains and maintains its superiority.
To that end the marketing mantra needs to evolve to the 5 I’s for any marketer to be effective: A relevant Insight, A Powerful and Unique Idea, A Breakthrough Innovation, A 360 degree Implementation and A Seamless Integration. This will ensure success in today’s dynamic, competitive business landscape.
T
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