Market Power: practical ideas from the Indian corporate world
The market is the sole determinant of whether a company will succeed or simply collapse. Markets are always powerful. The power of markets needs to be understood in the changing dynamics of any market. Certain powerful ideas, taken from the book on "Marketing Genius" by Peter Fisk, are taken and then extrapolated to the Indian context in this article.
Introduction
Decades ago, design innovation in the form of a small car suitable for Indian markets came in the form of Maruti 800. The car looked cute, it had all the basic advantages of a functional small car ideally suited for a family of four. And the price was reasonable. Out went the Ambassador and the Fiat cars. Both companies did not understand what it took to satisfy customers. A deep insight into changing customer needs is one task that can never be ignored by any company. If done, such a mistake will simply land the company in deep trouble.
Be that as it may, the concept of Market Power, as explained in the book "Marketing Genius" by Peter Fisk, is illustrative of what it takes to understand markets. As usual, certain quotes from the book are taken as given and then extrapolated in the Indian context with appropriate examples.
Look at the basic diagram given in the book. ( page 48).
As can be seen from the above diagram the emphasis has clearly shifted from powerful suppliers to powerful customers. Yes. There is a high decibel advertising of standardized products in mass markets. For example, cashing in on the fear psychosis that has enveloped Indians in most parts of India, Hindustan Unilever has come out with a very intelligent advertisement in many National newspapers, openly speaking about their anti-virus property of their soap, Lifebuoy. This is a very intelligent strategy.
However, in the retail markets, particularly in the semi-urban markets, people may still not buy Lifebouy but buy its chief competitor Dettol. There is a powerful connection between personal hygiene and Dettol in the minds of millions of customers.
It does turn out that a) Customers need to emotionally connect to customers b) Create entry barriers as quickly as possible c) Keep on highlighting the power of the brand d) Obtain direct customer feedback and e) Keep on innovating to reach customers every day. Only then can the Indian companies hope to cope with the power of markets that keep changing every day.
a) Customers need to emotionally connect to customers b) Create entry barriers as quickly as possible c) Keep on highlighting the power of the brand d) Obtain direct customer feedback and e) Keep on innovating to reach customers every day. Only then can the Indian companies hope to cope with the power of markets that keep changing every day. Customers need to emotionally connect to customers
Here is one good quote from the book. "Customers are hard to reach, its difficult to get their attention, they have high expectations, and are even harder to retain. We must go to them, rather than they come to us. They are not customers of ours. They are our buyers, belonging to themselves. We need to do business, how, where and when they want". (page 49).
As explained in the aforesaid diagram, customers call the shots in markets of surplus supply. Take, for example, the ready-to-eat or drink market. There is always a good need for badam milk. Through innovative advertising and making the product available in packs of Rs.5/-, the famous Aaachi brand has done the magic again. Customers are tempted to try the product. The emotional connection is even more evident when the owner himself endorses the brand. This is a classic example of a "clear the cutter" strategy that works. More so, in Tamil Nadu, where customs and traditions play a major role.
The "go-to-them" phrase can be understood in different contexts. Even small branded restaurants can make a big difference. There is this small restaurant called Rayars Mess, in Mylapore, which is very near Chennai Central. This hotel has been around for decades. They serve red hot South Indian food, and customers can always hope to get good side dishes of chutney and sambar. The high expectations of customers are satisfied and it goes along with good customer service. It is a brand that is famous in Mylapore. The family members do the cooking themselves. Personalized bonding helps in a significant way and the repeat customers keep coming in through word of mouth publicity. Create entry barriers as quickly as possible
Several Youtube videos in Tamil, made about the Rayars Mess, explain that the customers are regular customers for decades. The owners do not want to expand their operations. They cater to just 15 to 20 people and keep on adding value through customer service. The taste of chutney is maintained to this day.
Similarly, Lays, the famous brand of potato chips from Pepsico, has successfully created entry barriers. The taste is too good. Of course, Bingo from ITC is a major competitor, but the other competitors are all local brands and do not have the national reach as Lays. The secret of being present in changing markets is to create brands that have literally enveloped the collective consciousness of customers through good entry barriers. Keep on highlighting the power of the brand
The advertising campaigns have to be innovative. The emotional connect is important. So is the need to continuously evolve the brand to reflect the changing needs of customers. It has been reported that based on market research, Hindustan Unilever brought in an additional element of women empowerment by highlighting the same in its advertisement for Hamam. That strategy worked.
Voltas brought in a good brand ambassador, Mr. Murthy. He would go on to explain all the functional features of the AC brand, but the advertisement would simply take over television screens in late March and continue during the entire summer until possibly even the end of August. The uniqueness of the advertisement combined with the really superior features has made Voltas the number one brand. The "entire house lamination" advertisement combined with a bit of humor, has made Asian Paints such a powerful brand in the minds of customers. Any single house-owner of an independent house would be tempted to try the particular brand of paint. Obtain direct customer feedback
Not only FMCG companies. Even manufacturing companies of consumer durables are actively collecting a good amount of customer feedback. It is reported that Havells was actually closing all the negative feedback about competitor products. Result? Today, it is the market leader in most products.
Kotak Mahindra Bank found the need to innovate in opening savings accounts, based on customer feedback. It's zero balance, online accounts have stormed the market. Keep on innovating to reach customers every day
The larger retailers of textile goods in Chennai really stand out in this regard. Not only have they reached new markets, but they also have innovated in terms of the range and the service. There is something for everyone, at any point in time. The advertisements keep on talking about new offers, day in and day out. Word of mouth publicity helps. The massive advertisements on television, that keep on reaching millions of customers have made each brand a success. Jayachandran textiles, Pothys, Chennai Silks, Saravana Stores, RMKV and Nallis. Each brand is a truly powerful brand. And the story continues.
The innovation lies in the details. Chennai retailers are not alone. Booking.com has very good cancellation facilities and no payment upfront facilities as well. It is growing day after day. Any negative feedback is attended to immediately. Customers are given an update quickly. Conclusion
Certain strategies adopted by some companies in India, to innovate and stay alive in markets have been discussed above, in conjunction with the conceptual inputs from the book under reference. The examples are indicative and not exhaustive.