Does the game change?
An article of a 1,000 words is too small to explain the significant challenges that one faces in a digital world. That is why my colleague (Brian Almeida) and I wrote a book titled Marketing in a Data/ Digital World (available on Amazon). This was a book directed at millennials who are responsible for start-ups and for a few of the earlier generation, already in marketing, who would be facing the challenge of the volatility, uncertainty, complexity, and ambiguity (VUCA) era and the digital era – all at the same time!
However, I am penning a few thoughts based on the questions Mr Jaishanker, the consultant, raised, which I am using as a guideline for this article. Though Mr Jaishanker and I had a connection through IMC-India, over many years, it was only a few months ago that we physically met and had a very pleasant interaction. This note is an extension of that luncheon conversation.
What is my reaction to Peter Drucker's quote: "The aim of marketing is to make selling superfluous."
I have to admit that I am an old-world marketer. I believe that we can keep amending, and expanding and refining – but the basic principles do not change. Sales is a part of marketing. The emphasis on the sales function may reduce with the evolution of the digital world and the use of technology. But sales will still be important, and we will never be able to completely write off selling, which will remain as part of the marketing mix.
Marketing has gone through a revolution from the days of the 4 Ps
Maybe, to begin with, it was a slower 'evolution'. In more recent times, it has been closer to being a 'revolution'. We all know that we have gone through the period of the 4 Ps of Marketing (McCarthy).
Marketers could improve the suitability of their product/service to meet customer needs by adjusting 4 parameters – product, price, physical distribution and promotion. Later, two more Ps were added – People , who play a role in defining the matrix and creating effective messaging; and Politics, which impact trade relationships within countries and even, locally.
In the 1990s, the focus changed from product and service to the customer – and Robert Lauterborn of the University of N Carolina, US came up with the matrix of the 4Cs - Consumer wants/needs; Cost to satisfy; Convenience of buying; Communication.
The customer became the stronger driving force for product-related decisions, while the advent of online marketing has reinforced the validity of the 4Cs—the parameters of communication and convenience of buying have been most impacted.
Now, digital advertisements are both more relevant and more economical than mass media advertising. And we know what has happened to the convenience of buying with Amazon, Flipkart, BigBasket and others showing the way.
In the 2000s, the Marketing Handbook outlined the 4Rs of Marketing that pertain to the age of the internet – Relevance; Response; Relationship; Return.
Prof V Kumar in US is a torchbearer for what we now call 'Engagement Marketing' (EM). He says that this technique will define a business for the next five years. Engagement is the total value provided by your customer over the next three years. This theory has evolved from the notions of transactional and relationship marketing. EM also makes use of customer lifetime value—the net present value of future cash-flow from the customer.
In the casual restaurant category, customers who are fully engaged make 56% more visits per month than those who are disengaged. In the electronics industry, engaged customers make 44% more visits per year and spend US$84 more than those who are disengaged.
Sometime back, I saw a clothing manufacturer analysing the data of those who had bought shirts at a special sale. Then they sent out a general promotion for the new blue blazers they had developed. The response was 9%! A month later, they sent out an e-mailer only to those who had bought blue shirts. The response was 35%. This is a simple example of how data is now being used!
The shoeshine boy at VT station has taken data collection to its simplest level. He sees the passing crowds. He taps his box to make a sound only when he sees a passenger wearing leather shoes. He ignores the others (the vast majority who wear sandals, sports shoes, and canvas shoes). He is compiling data and making a selection of the target audience confidently as he sits at his shoebox.
A question often asked is how the marketing function has contributed to tackling the business challenges faced by companies in the pandemic era.
I can only tell you that much of my consulting business has crashed. Surely, companies needed guidance on what to do in such a crisis—but they also wanted to save every penny in this environment. So, pay for consulting? No way!
My son ran an event management company in Bengaluru. With the pandemic, there were no conferences, seminars, weddings, or exhibitions. Business came to a grinding halt!
But when you walk out in the city, you find that many restaurants have started home delivery services. The shoeshine boy from Chembur station is now offering home service. My wife buys all her grocery requirements from BigBasket (BB)—and BB has also gone beyond selling groceries to selling bathroom brushes and other non-consumables. Of course, there are those who could not change 6Ps – and either shut down or have the financial strength to wait out for the epidemic to be over.
You will also see the number of online education courses being advertised. These are colleges and universities with foreign collaboration—putting in large advertisements in the media. But you will have to look very closely for the address and find it is somewhere in Gurgaon or in Telangana. The high visibility of Byjus and of Bennett—these are sample products of this epidemic.
Do companies improve their client relationship as they go more digital?
The answer is yes and no!
Very often, companies think technology will solve all their problems. It won't. When I phone my holiday resort company, I get connected to a voice and then have to press 2 , then 3 , then 4. And then—the agent is busy. Please hold on. But there is music, to keep you occupied. Having followed the process three times, I give up!
Also, every time I phone, it is a different person to whom I have to explain the problem all over again…… for the third time?? This happens with my bank, with my insurance company and many other situations. Working in a 'PhyDigital' world can also be very distressing.
I am sure we will overcome these problems as we go along but as Sanjay Mehta, Chairman of Unilever says—we are now moving from a VUCA world to a BANI world – Brittle, Anxious, NonLinear, Incomprehensible!
The number of start-ups in India is among the highest in the world. Will all of them succeed?
Not really. They say that about 40% of the start-ups fail and close down by the second year. There are some that become Unicorns—and quite fast. A recent example is SportswearIPO. These are the ones that have truly identified a market need/want - and developed an appropriate product - and ALSO built a management team which combines all the talents required for the success of a business (as Narayan Murthy did when starting Infosys) and not just depending on one aspect – superior technology (which is the cause of failure of most startups)!
These are random thoughts on aspects of marketing which will always rest on the foundation of the 4 Rs and will therefore be able to manage the challenges of VUCA and now BANI in our complex environment.
My friend Hermawan Kartaja, the marketing guru of Indonesia, in his latest book—Marketing 5.0—says
Data-driven Marketing will have to cleverly use a mix of Predictive Marketing;Contextual Marketing; Augmented Marketing
This can well be a subject for another article!
(Walter Vieira is a Fellow of the Institute of Management Consultants of India (FIMC). He was a corporate executive for 14 years and pioneered marketing consulting in India in 1975. As a consultant, he has worked across the globe in four continents. He was the first Asian elected Chairman of ICMCI, the world apex body of 45 countries. He is the author of 16 books; a business columnist; visiting professor on marketing in the US, Europe and Asia. His latest books are "5 Gs of family Business" with Dr Mita Dixit and "Marketing in a Digital/ Data World" with Brian Almeida. He now spends most of the time in NGO work.)