Adieu, decade of turbulence!

They made for much hype, agitation and excitement - the Y2K bug, the dotcom bust, the cell phone, big-buck brand campaigns, middling service notwithstanding ….

Writing a year-end column is challenging enough but to review the decade is a bit like landing up at the Centurion on a damp, murky day straight from the airport and finding Dale Steyn thundering in and suddenly realising that you have walked in to bat without your protector! On the lighter side I was trying to recall just what are the changes that have happened in my own life over the last decade and came up with a sensational discovery.

Ten years ago I used to painstakingly write my column on ruled sheets of paper and my secretary (who is now in Australia perhaps supporting the rejuvenated Aussies) would dutifully key it in. (I used to have a decent handwriting thanks to the plethora of loving and frequent impositions that my old school, Don Bosco Egmore in Chennai, so lavishly bestowed on me.) But today, as I key in my fortnightly 1,500 words religiously on my Apple laptop, my handwriting has gone for a toss. Of course, we could argue endlessly about whether my ability to write columns has improved! But let's move to more dramatic things - the economy, the consumer, brands, communication and life in India over the last decade. What has happened and what seems likely to happen in the near future? Let's take a look at the past before we venture our opinion on the future.

Y2K to Wikileaks

Do you remember the turn of the last century and the excitement, the dread around the Y2k bug and its impact on the software business at least? Well, things have blown over and the winds of change have blown in - something more sensational - Wikileaks. God, has the media gone to town or what, with every politician and statesman making more off-the-cuff remarks than Tendulkar's numerous centuries. The decade witnessed the dotcom boom and consequent bust. I remember (painfully) that our company that was called brand.comm became brand-comm as we went away to lick our wounds after putting all our eggs in the dotcom basket. Speak of the power of brand recall, many of our clients and well-wishers still refer to us as brand.comm. But the World Wide Web has taken over and digital is the medium to be in and everybody and his brother-in-law claims to have a digital strategy.

Of course, while many are denying that digital will actually take over the Indian markets, there is no denying its potential or criticality and the smarter, savvier brands are those that are showing the way rather than following the leaders. In a sense, India had been a follower of Madison Avenue earlier and is following in this medium too, as connectivity and security issues continue to dog us. But make no mistake, India is poised to fly and is just waiting to take off despite the blocks. But India has to discover its own new model which might be a marrying of offline with online. Consider a marriage site such as bharatmatrimony.com which has offline centres where horoscopes are printed and given to anxious and yet technologically challenged parents. India has traversed the mobile space with greater speed than several others and soon there might be a union of the two to move ahead. The future will have to do with harnessing the power of the mobile.

Roti, kapda aur mobile

No analysis of the last decade in India would be complete without the telecom and mobile revolution that has swept through the country. Even small villages in India discovered the pleasures of being in touch with their relatives in far-flung places thanks to the STD booths that littered the length and breadth of this country. Today, thanks to technological innovations it is possible for someone living in the villages to do a video call with family members he has left behind in his quest for employment and livelihood.

But I am getting ahead of myself and missing the mobile services revolutions. This is something India and Indians can be justifiably proud of. Today the mobile population is close to 800 million with 16 million phones being added every month. Mobile phones from China and Taiwan have flooded the market and new brands such as Micromax are giving the leader Nokia a run for its money. Mobile service operators continue to advertise heavily - and often produced outstanding advertising. Brands that readily come to mind are Idea Cellular with their “What an idea, Sirjee!” and the Vodafone campaigns featuring the now famous pug dog and the Zoozoos. There is no doubt, in my mind at least, that mobile services advertising has overtaken the colas in creativity.

The sad reality, though, is that advertising agencies continue to create ads that are independent of the quality of the service. Of course, this strategy is not unique and continues to apply to banks as well. But to return to the mobile services business, while it has continued to be driven by schemes, price offers and tremendous advertising expenditure, there has been a game-changing strategy too. I speak of the Tata Docomo strategy of per second billing which the competitors too had to reluctantly follow, to the delight of the consumer who continues to speak as rapidly and as needlessly as some of our TV commentators.

The retail revolution

It is difficult to discuss the last decade in India without the growth of organised retail as players such as the Future Group.

Trent and Reliance followed the Shoppers Stops and the LifeStyles of the world and went into the smaller towns and realised there was a completely service-starved consumer waiting for them there. Yes, the value format was here to stay and the consumer in the smaller town was growing in confidence and affluence. On October 15, 2010 no less than 150 Mercedes Benzes were sold on a single day at Aurangabad!

After that interesting titbit, let's return to organised retail which, though it may get media attention and interest, accounts for less than 3.5 per cent of the total trade. Not a figure to be sneezed at but nothing to set the Ganga on fire either! Yet, the decade has witnessed the emergence of private labels and the beginning of the tension between brand marketers and large formats, which are pushing brands to be on sale constantly. Brand values are being diluted by each and every sale and hardly anyone visits the company showroom as they find the well-lit, air-conditioned factory outlets a far cry from the factory outlets of yesteryear where you had to check your merchandise and could not exchange it even if it was defective. How times have changed and with it, consumer preferences!

Summing up

The consumers are changing, becoming more affluent and more demanding. They are used to quality, such as the new airports. Service and consumer engagement will be the key. How good is your service offering? Price is important as Big Bazaar has demonstrated. But how well are you positioned? The Nano is struggling as it is seen as a “cheap car”.

Agencies, in their quest to talk about things like “consumer connect”, are forgetting the importance and value of the big idea, fragmenting their resources and trying to achieve too much with too little.

The decade was easily the decade of crises – whether it was the financial crisis or scam after scam that India unearthed. The media too, which was busy playing judge and jury, suddenly found itself in the dock. Crisis management was key and few of the companies seem to have mastered the fine art of crisis management. And the next decade will see more of this. After all, we live in Kalyug, don't we!

Companies that pay lip service to social media and are experimenting with it without their hearts in it or getting their hands dirty are going to be hit, and soon. Companies that harness the mobile phone's capability will thrive.

Agencies continue to bemoan the lack of talent and yet steadfastly refuse to train their personnel. First we pay peanuts and then refuse to train the monkeys that we have brought into the industry, lest they be poached. Why wouldn't clients be frustrated?

Clients, even as they understand and appreciate the need for good creative, continued to haggle on prices even as they complained about the quality of service.

Brands changed their identities, often because they seemed bereft of other ideas to rejuvenate themselves. When will brand owners realise it is more important to get the essence of the brand right rather than merely tinkering with cosmetic things?

And finally, longevity will be key. Brands that endure will have clarity and consistency. In 1999 I was in England for the best World Cup to date and Sachin Ramesh Tendulkar had to rush back to India for his father's funeral. He came back to thrash bowlers all over the park and dedicate his efforts to his deceased father. Now he has scored his 50th test century and dedicated that too to his father. So that's one factor that has been consistent through the turbulent decade.

Consistency and longevity will continue to be key in the next decade as well. Here is wishing you a great year first and a wonderful decade later!

Ramanujam Sridhar, CEO, brand – comm.
Read my blog @ http://www.brand-comm.com/blog.html
Facebook: facebook.com/RamanujamSridhar
Twitter: twitter.com/RamanujamSri

Small wonder or big challenge?

For all the excitement surrounding what was meant to be a Rs 1-lakh marvel, the Nano hasn't been having a smooth ride..

Whatever is happening to the Tata Nano? The brand which was touted as the greatest thing to happen to the Indian automotive industry and promised to transform the life of the middle-class consumer in India suddenly seems to have hit a speed breaker. Let us just go back a little in time to the pre-launch and the announcement of the Rs 1 lakh car which was actually made by Ratan Tata in March 2003 at the Geneva Motor Show. It was hailed as a triumph of Indian innovation and showed the disbelieving Western world as to how India was able to tap the fortune at the bottom of the pyramid and how India had leapfrogged to the forefront with its dramatic new offering. The media went to town. Airport book stalls were full of books on the car and its amazing journey — Small wonder — the making of the Nano was just one of the titles.

Along with the Corus and Jaguar takeovers, this announcement and consequent hype really put India on the global map and projected the Tatas as a name to reckon with in the international business arena. Then a few things went wrong. The company could not go ahead with its original plans of having a plant in Singur, thanks to a few well-meaning politicians, which set the project back quite a bit in time. Neither were they able to hold to the original price promise of Rs 1 lakh, which to my mind is a far bigger problem than it seems. To further compound the brand's woes, a few cars caught fire, leading to nasty jokes from the competition as to how the car is the first to have an external combustion engine! The demand tanked. If media reports are to be believed, there is an inventory of nearly 20,000 Nano vehicles and a very worrying order book position. The opposition secretly gloated, much as the rest of the cricketing world is gloating at Australia's current misery.

The company too seems worried as it must be. What exactly is the problem? Is it a case of hype overtaking the brand? Is it a case of an inferior product that does not meet the safety requirements of Indian conditions and weather? Is it a case of poor positioning as the much-touted people's car can easily be seen as a cheap car? Who is actually buying that car, is it an affluent Indian buying his third car that he had read about in the business press and could talk about it in his cocktail circuit or a middle-class Indian wishing to upgrade from his current two-wheeler? Neither Andrew Hilditch nor I have a solution to Australia's current cricketing problems, but I do have some thoughts on the Nano and what it can possibly do, so let's stay with the car that started to make history and yet seems to be going speedily downhill.

The great Indian consumer

Sometimes we get caught up in the power of our own rhetoric. We believe that we know everything about the consumer; after all we have built brands and businesses. While that may be true we sometimes miss ‘the blinding flash of the obvious' as Tom Peters would say perhaps when it comes to customers. Way back in 1987 (hope you were born then) I bought my first car. It was a second-hand Premier Padmini (23 years later and 15 cars later I still remember the number of the car). That was a special day in my life and if I may add, in the lives of my neighbours. Suddenly I was somebody. A hitherto unknown individual who zipped around in a TVS Suzuki with his child in the front seat, had grown in front of their very eyes, simply because a car had entered a middle-class home. It was a manifestation of my success in life. I know how proud my parents were of me that day.

Now here is my disconnect with the Nano: Has all the hype created in stereotyping the brand as synonymous with “cheap” devalued respect for the brand? As an expert asked me, “Who would want to be owner of el cheapo?” Let's spend a moment understanding the ‘social currency' of a car in our lives. It is about status, prestige, recognition and authority. Does the Nano, the way it is perceived now, deliver on these? I wonder.

Who is the customer?

The lowest priced car has certain advantages and certain disadvantages as well. The advantage is the price (even though it is not Rs 1 lakh) is affordable to a whole lot of Indians. I know a number of affluent Indians too who have bought it as their third car! Are they the core target audience? Or is it someone who is currently riding his two-wheeler in the dust and grime, breathing in the exhaust of the bus in front of him, who wishes to graduate to the safety and comfort of a four-wheeler, however small? This actually leads me to the next concern and that is the concern, or is the right word obsession, with space. Indians live in cramped conditions and dream of more space. They want more spacious houses, space for their children to play and space to park their commodious luggage in the boot. Have you seen any Indian travel light? While the Nano seems fine for two, how many families have two members and even if they are “dinks” (double income no kids) they would find another similar family to travel with. Consumers often do not state the way they actually feel and brands can get into trouble by ignoring what the consumer is not saying overtly. In many ways one wonders if the design of the car, though excellent, is anchored in Indian needs and will address our concerns.

Public relations and the brand

I am a great believer in public relations and have seen that a disciplined, strategic approach builds credibility and image. The media coverage for the Nano has been phenomenal; I am sure running into several hundred crores, if one were to do an analysis. But what has the coverage been about? It has been in the business press about innovation, Indian ingenuity, the people's car … A lot of this is corporate PR and coverage which has limited if any, relevance to the consumer, if he happens to be a middle-class Indian currently zipping around on a scooter with aims and hopes of buying a car. And the challenge of the cars bursting into flames or smoke has not been addressed adequately by PR. PR can handle crises, soften the blow and even shift the focus to actual consumer experience. I am sure there are enough satisfied customers of the Nano. How come I have not heard about their experiences while the accidents have been blown out of proportion?

Positioning — biggest opportunity,

greatest challenge

The biggest challenge, in my view, at least, is that the brand has not been positioned clearly. The corporate position of “innovation”, “affordable car”, have all been milked. Different people have formed their own opinions of what the car is and unfortunately many of these have not been helping the brand. In the early stages the brand did very little advertising as it probably believed that it had a healthy order book and a waiting period. But advertising clearly helps define and answer some key questions — who is the car for? What is the “reward” for the consumer and what is the “support” for what we are claiming? The problem has just gotten a little more complex now, but nothing that sharp strategy and smart execution cannot handle.

It's the consumer, silly!

I too wanted to buy a Nano when I saw all the hype and my family asked me a simple question that they often do, “Are you mad?”, and I promptly desisted. How many such conversations are happening all over India? Often companies forget that business is not so much about innovation, hype and media coverage but about listening to the consumer. What do people who have bought the car have to say about the Nano? Who is not buying the Nano and why? Is there some mental block? I also think there has been a serious breach of confidence in the inability of the company to deliver a car at Rs 1 lakh. I really do not know how that is going to be bridged. And there are some practical issues that need to be ironed out, such as finance. Car finance is more difficult and messier than two-wheeler finance and the company must address this problem if it wants the numbers.

In the final analysis, the Nano seems to be an excellent product poorly marketed and even more confusingly branded. It is in the interests of the Tatas to ensure that they do not end up with egg on their face and in my view, the problems of the Nano can be handled. “The small wonder” is going through a big challenge. But it is not insurmountable.

Ramanujam Sridhar, CEO, brand – comm.
Read my blog @ http://www.brand-comm.com/blog.html
Facebook: facebook.com/RamanujamSridhar
Twitter: twitter.com/RamanujamSri