Sunday, September 14, 2008

The indian Economy and competitiveness

On Being Competitive

By Harish Bijoor

Marketing is too important to be left to marketing people!

Ouch! That hurts! But that is the reality of the future for sure.

Are you gearing up for change? Are you concerned about being competitive in the long term? Time to re-think the line. Marketing is too important to be left to marketing people.

Marketing is therefore the key concern of every Tom, Dick and Harish in your organization. It should be. From the CEO to the ‘chaprasi’ at the door, marketing is a ubiquitous fetish to adopt and cherish for the future ahead of us.

Firstly, marketing is all encompassing. It is about all of us in the business of life itself. Not a moment goes without the need of a marketing intervention. From the early morning cup of coffee to the late night tryst at the potty, marketing intervenes every moment of our lives. We can’t live without it. It is a part of our lives and indeed a part of our psyche at large.

Never mind then whether the man at hand is an entity urban or an entity rural, the needs are largely the same. The same set of bellies and bladders that crave for food and drink and the same set of teeth that crave that brush with hygiene early in the morning.

Marketing is therefore about every one of us. It is all encompassing. Marketing therefore needs to be inclusive. Inclusive about all our needs and inclusive about every one in the chain that contributes today and have the potential of contributing tomorrow.

Marketing is about competition then. The day of the early-mover-marketing is over. In comes the day and age of the mature market. The mature market where top-lines are under threat to the oldest marketed categories of them all. Consumers have live din these categories pretty loyally for long enough. There is a huge need and want to move to the better product and the better price. Marketers are hastening this process further.

As marketers cut prices, one in tandem with another, bottom-line profits become thinner and thinner. The vain quest for the top-line is hurting the bottom line no end. As all of this happens and the premium of the brand, built assiduously over all these years vanished, the concept of branding itself is in question.

The markets are therefore drying up. The early marketers of the day did his job pretty well. The marketer of the day is however finding it tough to go forward. The future is all about a competitive context that is different. A competitive context that needs to be understood carefully before planning a foray that is different.

As traditional markets dry up, time to look at the new. Look at the standard process the Indian marketer has adopted over the years. Step one was into the nascent urban market. Pluck the low hanging fruit of urban first. Pluck then the higher handing fruit of urban. Go then to the low hanging fruit of rural (43 million homes). And then into rural that is just about developing (90 million homes).

The only reality out there is competition. Marketers of the day face competition in one of the following four formats.

The competitive advantage of India in world markets is best assessed by taking a quick peek at the models of competition possible in markets of the present and the future.

If I am to look around the nations of the world and correlate models in current use, there are four distinct patterns that emerge. Four clusters that have whole sets of nations congregating in models those seem to work for each of them differently and with different levels of efficacy. Needless to say, the peculiarities of each nation in question dictate the distinct choice they have made for themselves. Let’s visit the clusters. And let’s call them all kinds of animal names.

1. The Earthworm Model:

The passive model of competitive reaction. The invitation theory that is best practiced by the earthworm. A rich worm really. It knows the basics best. It is in constant touch with the earth that it seeks nourishment from and nourishes back simultaneously. A fundamentally strong being.

Several problems in this model though. It is passive for one. Non-reactionary. A model in the self-fulfilling prophecy mode. The best example of the fatalistic theory in practice. When faced with danger, all it can do is continue its humble journey in the earth. Competition kills this model with ease. There is no reaction. The fatalistic model of competition at its best!

Is Indian marketing here?

2. The Snail model:

The common competitive model in practice by a whole host of nations. This model is reactively proactive. A clear cocoon orientation. When faced with competition and danger, there is a regression into the shell. The withdrawn marketer at play. The philosopher marketer even! The marketer who revels in the safety-static nexus. Waiting for the competition to just go away, so that normal life may resume again!

Is Indian marketing here?

3. The Porcupine Model:

This model tells the competitor clearly of the array of weapons that are available for retributive action. There is a clear emphasis on the display of the arsenal. It believes in the overt display. A clear d├ętente model of competition. Avoids a lot of speculative action and is ready for the real battle

Is Indian marketing here?

4. The Everyone Else Model:

This is the model of the real-time player in competitive markets of the present and certainly the future. This is the real-time marketer. Reactive when necessary. Proactive when necessary. Guerilla in tactics when necessary as well!

This is a constant-change oriented model that believes in watching the scenario carefully and reacting accordingly. Making forays into proactive territory on a speculative basis. Never mind if even only one of those sixteen forays actually click! Life in the fast track of competitive marketing is pretty un-predictable and speculative. Change here is absolutely discontinuous. Making a decision on a point of competitive strategy based on happenings of the past and the present could be disastrous. The future never ever happens the way the past decided.

Change here is so discontinuous that it is aptly illustrated by the example of the baby-arrival process in the house. The first child in this baby-boomers house is born out of a Caesarian section, gone in for by an over-zealous gynecologist. The second baby of the house is therefore predictably to be one out of a similar process. Caesarian section! No! It isn’t. Change is discontinuous. The second baby is a natural birth! The third child is due to happen then. This time round, its Caesarian section as well! Oops!

The fourth child of this baby-happy home is due. Change is indeed discontinuous. There is no predictability here. Guess what! This time round, the baby is actually conceived, carried and delivered by the father of the baby! Oops! Again! Change is indeed that discontinuous!

Shouldn’t Indian marketing be here?

The British left India as a nation of shopkeepers. Our retail universe that covers a nano-fraction of super-markets, large numbers of small and medium sized shops and cubby holes of retail commerce in remote inaccessible corners of the country, is the biggest you can find in any of the 182 countries that comprise the world and its consuming markets. A population of 12 million retail outlets to service the needs and requirements of the world’s second biggest consuming mass of people!

The one big strength that less than one other nation in the world can stake its claim to, is the size of the population that rests within the boundaries of our country. A huge weakness of gigantic proportions when viewed from the many development-oriented periscopes of the past. Not so when you view it with the future in mind. A future that is energized by these very large masses of people who have been the biggest liability for the nation of a billion plus!

The past viewed people as a liability. Not enough physical work to go round, not enough food to eat and of course not enough education to ventilate around. Every bit of progress that development achieved was sacrificed very, very quickly (possibly even before the economist was able to record and publish the feat), at the altar of population and its rather robust pace of growth.

While every sector of the economy did reasonably well in bits and patches over the last hundred years, so did the sector of population growth. Stretched food resources, stressed out finances, a pathetic situation on the physical infrastructure front and a complete lack of positive momentum represented the development of the last hundred years in India. People were therefore the biggest liability.

Not so anymore. Not in the hundred years ahead of us. One of the biggest assets of marketing-based India is its numbers in the very many homes that dot the countryside of ‘sunny-side-up’ India! Lots of existing people and a robust yen to propagate more of the kind, only means a lot more stomachs to feed and a lot more bladders to fill. Lots more bodies to clothe and a lot more minds to educate.

Think of a product. Think of a service. Think of a want. Think of a need. The biggest and the best of them will linger in the land that is India! The marketing future of India is therefore made. Ready at the take-off stage which will have many a Schumpeter stumped!

But then, people are not the only need of a consumer market. Consumption is certainly not the only key to unlock the riches of a marketing man’s Pandora’s box. Money somehow seems to be the real key. More money in these many hands, more the consumption. But then, is the money around?

While the pessimists answer to the question will say that men without money or men without the means to make the money, are of no use to marketing and its future, the fact remains that there is a value in the market that has a huge potential. A potential that can well nigh break open huge values in the times to come.

Let’s just remember one thing. India has been a poor country for a long, long while now. People below the poverty line have numbered a strong platoon of people. And despite it all, the population has grown, survived and continues to thrive in its sheer numbers. People have found a way to survive. The fittest have survived on high value brands, the less fit than that have thrived on brands of a lesser caliber in the country. Those even lower in the hierarchy have survived on the fringe of the commodity in every category of want and need. Consumption needs have always found answers. Consumption solutions for all!

There is therefore a pyramid of consumption that lies all over the slopes of Maslowe’s hierarchy of needs. But then, everybody, rich or poor, has fallen within the confines of this pyramid. And just as long as they do, there is indeed potential for a robust market for commodities, quasi-brands, brands, super-brands and of course at the ultimate level of the self-actualizing folk, no brands at all!

Every one of these segments has a value though. And in value rests the potential for the marketer. The one big true-blue competitive advantage for India of the present and India of the future, is indeed its large population base articulating every basic need in consumption of products, services and utilities.

Time to change the paradigm of India’s population then! Every marketer of whatever origin, be it from within India or outside, will queue up in the consumer markets of the country, trying to woo the wallet of the willing. As traditional source markets reach a plateau in their consumption, nascent markets like the one in India will hold a great deal of allure to the marketing man in his Western strait-jacket.

The author is a brand-domain specialist and CEO, Harish Bijoor Consults Inc., a private-label thought-leadership outfit with a presence in the markets of UK, Hong-Kong and the Indian sub-continent. Email: