How marketing dominated, declined and then resurrected through the decades.
The 1980s were glory days for marketing in India. The skills were world class though the products they sold were not! The finest talent joined marketing companies, ad agencies and research agencies. Testimony to this is how successful this cohort has later been on the global stage. India's marketer of the 1980s innovated, adapted, brought science and art and slog to the marketing function. The first socio-economic classification of consumers was done in the 1980s; media planning models were state-of-the-art, though run on lumbering mainframes; advertising had a good mix of left brain brand planning and right brain creativity; and market research pioneered methodology to interview illiterate villagers, built algorithms to forecast market share and election seats and develop the discipline of qualitative research. Brands were built, nurtured and renewed over decades with caring and consumer insight. Distribution systems, with wide reach, efficiency and control, were continuously honed and sharpened.
How did this come about in a world of licence raj, slow growth, low consumer incomes, long waiting queues and 18th century products? Precisely because of these very reasons! Every drop of demand was precious, advertising often needed to be the creator and not the carrier of competitive advantage and consumers had to be truly persuaded to part with their limited money. Urban India was too small and rural India was in the dark ages, but rural marketing responded with the light of innovation and launched paisa packs, van advertising, exploited haats and product demonstrations.
Come 1991, the game of marketing changed from persuasion to proliferation. So much demand growth, so many new product segments - how do we be everywhere and capture as much we can? The product became the hero of the story, catapulted from the 18th century to the 21st century, whilst prices crashed and quality improved on the back of excise and import duty reduction and increased competition. Consumers, whose incomes and consumption confidence were growing, were delighted and needed no persuasion. Like devotees, they flocked to the temples of shopping.
The strategic focus of most companies shifted from managing demand to managing supply and they rushed to build efficient and scalable supply machines to service the demand. Into each cup some rain must fall, so how many cups you had out there was the key to revenue growth. In my book Customer in the boardroom, I have described marketing strategies of those two decades as Land Grab (grab as many branches, prime locations, air routes, etc.), Carpet Bomb (also known as spray and pray proliferating products, services, acquisitions, alliances, brands and brand extensions, etc.), Sales Force, pun intended, as marketing people started talking about 'feet on street' and unleashed armies to enter into bidding wars for customers, buying sales through freebies and discounts, Star Trek (grow through constant geography expansion) and Brand Voodoo Magic (which celebrity to use which event to sponsor, let's disconnect walk entirely from talk). In the late 1990s, as capacities built up and hype about the great Indian middle class blew up in our faces, we joked that B1G3F was a favourite marketing strategy (Buy one, get three free of anything at all).
Aiding the slide were happenings in the market research and advertising industry, where local boutiques, owner-managed with passion and pride, sold to large global agencies. Quality fell dramatically though the economics of the business improved a lot.
With the growth of Martin Sorrel's footprint in India came the death of the full service agency and the era of fragmented advertising functions. Value therefore flowed to the client though expertise didn't and the slide in quality was quite apparent. In the market research business, with Nielsen and its clones gaining dominance, customised problem solving research gave way to giant standardised, cookie cutter surveys and quick and dirty vox pop masquerading as qualitative research. No new media planning algorithms emerged, despite the explosion in media choices; consumer insight was all about product category behaviour; and micro marketing planning was the mainstay of marketing departments. No new brands got created, which were markers of the era of a young population growing up in a confusing, exciting world to which their parents did not belong or an era of changing society and family.
On the distribution front, the channel wised up and enthusiastically welcomed those who were willing to pay more, blunting the competitive edge of those who already had formidable distribution systems. They, in turn, responded by deciding that the distributors and retailers were customers too, and the distribution game changed from one of stuffing pipelines using muscle to serving the distributor better in a variety of ways. Modern trade did its bit too to heterogenise distribution and the sales systems evolved to becoming multichannel, multi-service organisations.
Interestingly, the 1990s-2010 period was also marked by the birth of whole new industries like telecom and financial services and consumer durables and personal transport increased in dominance and good old FMCG, for long the cradle of marketing excellence, declined and so did marketing expertise. The new clients were new to marketing, the marketing services industry had a talent flight to the likes of equity research and off-shored KPOs, and it was almost as if a reset button had been pressed. India Inc in these 20 years also learnt to effortlessly alternate between two modes — expand supply in good years and drive top line growth (bullish on marketing) and cut costs in bad years to boost bottom line growth (bearish on marketing).
The implicit belief in marketing departments and board rooms was that Government actions to drive GDP growth and their lowering taxes and interest rates were the key to driving up sales. If two-wheeler sales slowed, it was because banks were lending less, and car marketers called for the Government to decrease excise duty when car sales slumped, almost as if the marketing director of the auto industry was the Government of India! Every business plan presentation began with `the GDP growth is expected to be ..... hence my sales numbers will be ......’.
From the year 2008 onwards the much-needed wake-up call was heard. And, finally, the message went home that business cycles are here to stay, glory days don't stay forever, GDP growth is too fickle and markets too unforgiving. So, it is renaissance time for marketing. We are seeing green shoots already. These past five years, advertising has blossomed, gen-next marketers with no baggage are thinking 'digital first' and embracing the new marketing theories of the digital age, we are seeing new genres of data capture and analytics and a new kind of rural marketing, as rural markets become urban-like in sophistication and aspiration, though not in money.
E-commerce is now the most exciting new kid on the block, and here to stay. Did they revolutionise marketing practice? There's bad news and good news here — the bigger more iconic trail blazers are still stuck in the B1G3F era, confusing discounting as marketing, both in their mind and their accounting, or are under-pricing their services thinking that, one day, they will be able to raise prices. And, then there are techie marketers galore, who know their customers only by their pin codes. But there are so many interesting new e-enabled brands and services springing up that seem to be wonderfully consumer-centric and coherent in their proposition, merchandise, tonality, design appealing to a sharply defined consumer segment, and relentless in the way they use technology to tempt and pursue consumers and get them to haplessly drool and click.
The best marketing we have in India in a long time, though, is from the Narendra Modi 2014 campaign. Interesting voter segmentation, a good understanding that strategy means sacrifice and you can't possibly win them, all, an insightfully relevant proposition, catchy sloganeering, a pan-Indian brand personality created that is a well-crafted mix of modern and traditional India and every kind of media deftly used from good old street corners to modern digital advertising, not to mention micro-market street level planning.
Looking ahead, we see a set of never-before challenges for Indian marketing already under-way. A monster consumer has been created, who has had it all his way and been shamelessly wooed for 20 years and now is an enfant terrible, wanting the moon for sixpence. He is served by monster small suppliers, who are agile and nimble and 'high touch' and reasonably tech-enabled in their service. Discretionary income growths are slowing, even shrinking as high aspiration and a failed public goods system force consumers to spend more on utilities and education and private transport. And the Indian market is even more heterogeneous than it ever was. Different parts of it are in different stages of evolution, requiring a multipronged business portfolio and marketing effort.
Welcome back, marketing, glad that you are ‘new improved', you have your work cut out for you.