Thursday, August 13, 2009

India will rise as brand owners rather than as brand creators

Dr Jagadish Sheth talks to BrandLine on the human factor in business, the Easternisation of the world and the recession..

Dr Jagadish N. Sheth, Charles H. Kellstadt Professor of Marketing, Goizueta Business School, Emory University

Dr Jagadish N. Sheth, the Charles H. Kellstadt Professor of Marketing from Goizueta Business School at Emory University in the US was recently at Mysore as keynote speaker on the conference of ‘service strategies for global leadership’ organised by the Custommerce Centre for Service Excellence at SDMIMD. He spoke to Ramanujam Sridhar exclusively for BrandLine on a variety of subjects such as technology and service, China and India, changes in people and behaviour and branding. Talking to Jagadish Sheth is simultaneously interesting and inspiring. He is one who could be described as a pocket-sized dynamo of information and insights, all dished out with a disarming sense of humour and without the slightest trace of arrogance which might be understandable and excusable given his phenomenal achievements. The refugee from Burma, who grew up in Chennai and graduated from Loyola College, has certainly come a long way to being awarded as ‘Outstanding Marketing Educator Award’ by the Academy of Marketing Science. He is a prolific author, having co-authored hundreds of articles and books — some like ‘The Rule of Three’ have made waves globally. He hardly looks 71 and has boundless energy and enthusiasm and more hair on his head than people half his age. His sense of humour is infectious and conversation with him enriching.

Here is an excerpt of the interview with him:

Today there is a lot of talk about technology and customer service. Do you have any thoughts on the subject?

Yes, there is an interesting trend that is happening in the US. Probably as a consequence of the desire for cost reduction, human contact is reducing. This has created an enormously negative reaction from consumers. I would personally place a premium on the value of human contact. Human intervention can actually turn out to be much more cost-effective in the long run. Human intervention can be a very effective means of retrieving a service problem or situation with customers. People want other people to resolve their problems.

You obviously feel strongly about the importance of the human factor in business.

I am passionate about human beings and the value addition they bring. When a grain of wheat is transformed into a loaf of bread the value addition can be a mere five times. An uncut diamond to a finished diamond is perhaps 10-12 times. But when a human being is moulded the value addition can be several times over. There is no asset which is as mouldable or as malleable as the human being. Successful companies will have to discover the capability of making ordinary people extraordinary. They would be well advised to look at how NGOs operate as they seem to transform ordinary people into extraordinary people. India, for instance, has enormous untapped talent. Let me give you my own example. I was a refugee from Burma who made his way to Kutch. Today if I had been earning Rs 4,000 or 5,000 a month I should have been happy. But someone spotted the talent, and you can see the difference. India, to repeat, has enormous talent just waiting to be tapped.

In your recent book you talked about India and China rising …

Yes, the rise of India and China will make an enormous impact on the world. The rise of these two nations represents the changing economic and geopolitical alignment of the world. These two markets will be contested heavily as the rest of the world realises it needs to make its presence felt in these markets to be global players. Haier, the Chinese company, is probably the largest appliances company. Other brands such as Lenovo, Dell and HP too are making their presence felt. India does not seem to have a serious domestic player in the appliances market as Indian companies do not seem to have scale. Both India and China will have strong rural markets. While both India and China will go global, they will probably use different routes. China could use the route of manufacturing and exports, India could use the acquisition route. While this may have been temporarily stalled because of the current globalisation scenario, India could still get back on track.

You had spoken about China competing with India in the services sector.

I suppose China understands that India has a head start in certain sectors of outsourcing and technology. It is gearing itself up by training its children to speak English without a Chinese accent as it does realise that India has a head start in English which is a competitive advantage. The market will be big enough for both the players and India might cater to the higher end while China will perhaps cater to the lower end of the market. But the reality is that the world is comfortable dealing with India and selling to India. India is assuming leadership of the world as more and more Indian managers rise to positions of eminence in the US and Europe. Clearly the perceptions of India being a country of snake charmers is changing, and fast. India is emerging as a thought leader in academics and education, and people such as C. K. Prahalad are recognised globally.

Do you believe that the East is becoming more important in the world scheme of things?

Most definitely. I have a concept called the ‘Easternisation of the world’. Westerners, traditionally, are open to change, unlike Easterners who do have a tendency to resist change, being more traditional. Westerners have taken to Yoga, spirituality, Ayurveda, literature. Look at Slumdog Millionaire! I believe there is a fusion of cultures, what I call as ‘Christian Yoga’ as we have a situation where churches teach Yoga. Rudyard Kipling said “East is east and West is west and never the twain shall meet”. He was dead wrong. Incidentally he was wrong and is now dead (chuckles). There are other changes as well. The generation gap could be as low as eight years today unlike the 20 years or so that there was earlier.

Today we live in recessionary times, so what are the implications for customer service?

What do companies normally do in recessionary times? They normally cut back on items of expenditure, at times with disastrous results. They cut back on travel, training and education and on customer support. Traditionally technology has been the means of increasing productivity. The human race has traditionally embraced technology from the days of the fulcrum to the most advanced means of technology that is being used today. The solution to recessionary times is machine-enabled customer support.

We need to remember that people like machines. Today, thanks to the emergence of Web technology and broadband more customers shop online, particularly youngsters. Companies must encourage end consumers to do it themselves. People are also more comfortable dealing with machines as there is a consistency to them and humans vary in the quality of interaction with consumers.

Let’s move from service to brands. There is a lot of talk of branding in India, do you see any Indian brands making it big globally?

When you talk of brands you normally refer to product brands or service brands. Yet, there are brands that are business-to-business and corporate brands. Tata is a globally recognised and respected brand. Infosys is a well-respected brand and Wipro is not far behind. Indian corporate brands are making themselves felt globally. Yet, I believe India will make it to the top on a different route. India will rise as the country of brand owners than as the country of brand creators. You have a brand such as Tata Tea taking over Tetley. You also have other examples such as Jaguar which have been taken over by Tata. When it comes to the product space Indian brands are making their presence felt slowly. We have a brand like Patak’s Pickles moving from the ethnic space to the mainstream. Take Kingfisher beer, for instance; it is common for foreigners to ask for this beer in the pubs of London. So Indian brands are making their presence felt globally.

Finally, since you spend so much time with youngsters, especially students, what is your advice to them?

My advice to them is simple: “Never forget the purpose of your being here”. Management education is not only about getting a high-paying job. Students could ask themselves the question “How do I make money even as I do good for society?” You need to gain skills as well as knowledge. You need to remember you are embarking on a lifelong journey.

It is perhaps unlikely that you will start in a company and end in the same company as the earlier generation did. Be prepared too for mid-career crisis and remember that it could happen earlier to you.

Ramanujam Sridhar is the CEO of brand-comm and the author of “Googly - Branding on Indian Turf”.


Kasthuri Ramanujam said...

What a good one and a chance to meet a celebrity from the marketing field, Loyola can be certainly proud!!! I will forward it to the DB 64 group

C K Sharma said...

Good wide-ranging interview, Sridhar. You have been considerate to him and have given him a lot of space to answer questions. It would be great if you’d challenged him on some aspects (there really aren’t any Chinese brands other than Haier and I’m not sure this has the values and the depth needed for long term global impact).

Ramanujam Sridhar said...

Yes, he is very modest too despite his tremendous achievements. I suppose spending time in Madras helps!

Ramanujam Sridhar said...

CK You are probably right about what you are saying about Chinese brands. He did mention that even though China will try to emulate India , they might end up doing lower value work.