Sellers have too long focused on the narrow spectrum of sales: Niraj Dawar
Once you start to uncover costs & risks, you realise that there is tremendous amount of value that the customer is willing to pay that we neglect because of our focus solely on the product, said Prof Dawar in a special interaction with Vikram Sakhuja, Global CEO, Maxus
Vikram Sakhuja, Global CEO, Maxus engaged well-known marketing strategist Professor Niraj Dawar in an insightful discussion on how organisations need to revisit their ‘product-oriented’ approach and become more customer-centric at the IMPACT One-On-One with Niraj Dawar event in Mumbai.
Vikram Sakhuja: The fact that you are labeling this point about the need to be customer-focused rather than upstream means that people are not doing it. What is preventing them from doing it?
Niraj Dawar: For 250 years we have been focused on the upstream. All these years we have structured our organisations, our management practices, our culture, and the questions that we ask to manage the upstream. The factory is at the core of everything we do, or the product is at the core of everything we do. But business costs have shifted downstream. Value that customers are willing to pay for has shifted downstream. The centre of gravity has shifted, but we are still continuing managing the upstream. That is where we are right now. So, why is it so difficult? In one word, the answer would be inertia.
Vikram Sakhuja: You have also been asking Ted Levitt’s ‘marketing myopia’ type questions about ‘Which business are we in?’. Are you getting the sense that people are not asking this enough?
Niraj Dawar: Fifty years ago in 1962, Ted Levitt published a paper in Harvard Business Review in which he had said that companies are answering the question ‘What business are we in?’ too narrowly. He said, for example, the railway companies thought they were in the railways business, but when transportation by air and on the highways became common and inexpensive, the railway companies suffered and went out of business because they didn’t see themselves as being in the transportation business. As for the lessons learnt, they have not permeated management thinking. So, we still have companies like BlackBerry and Kodak, which eventually filed for bankruptcy and is trying to emerge from it. Kodak saw itself as being in the film business as opposed to being in the imaging business.
So, have Ted Levitt’s lessons been learnt? The answer is no. I think the companies need to ask another question in today’s age—“Why is a customer buying from us rather than from our competitor?” When one starts to ask that question, I think it will open a set of opportunities that I have been talking about.
Vikram Sakhuja: I loved the part where you said in your book how Apple did just that with their response through iTunes, at a time when Napster and others were having problems. Could you tell us what iTunes did that made MP3 monetise-able?
Niraj Dawar: Apple’s innovation was not necessarily the iPod. The MP3 player was, in fact, invented by a Korean company three years before Apple introduced it. The idea that consumers would share or download music was invented by Napster and others. So, Apple didn’t invent that either. Best practices in online retailing were invented by Amazon. So, what did Apple contribute? Steve Jobs stitched all these innovations together into a business model that asked the question – Why would customers buy music in an environment where they can download it for free? The answer was not in making better music, but in making music easily searchable; making sure the catalog was sufficiently large or giving consumer a mechanism that would make their entire music collection portable and make that collection searchable. All these are downstream reasons for why customers would buy music and that is what Apple did so well with the iTunes.
Vikram Sakhuja: In your book, you seem to have crystallised the entire game of customer facing strategy to two things – how you buy being more important than what you buy and how you buy being all about elimination of cost and risk.
Niraj Dawar: So, what I argued is that we need to be able to ask questions – “What costs do we impose on our customers?” “What costs do they incur in buying our product?” Or “What costs do they incur in searching, using, comparing it with others, or disposing our product?” There are so many costs that they incur through the entire chain of activities. We, as sellers, have too long focused on that narrow slice of “the transaction” because that is where money changes hands. If we widen our lens a little bit and look at the entire spectrum of activities, we would realise that our customers incur costs, which are sometimes far greater than the price that they pay for our product. If we can cut those costs, we create customer value, and often need not reduce our price in order to compete.
The same goes for the risks our customers incur. Risks are even more interesting because it’s hard to uncover the risks that people incur while consuming our products. So, once you start to uncover costs and risks, you realise that there is a tremendous amount of value that the customer is willing to pay for that we neglect because our focus is almost solely on the product.
Vikram Sakhuja: In terms of devising your downstream strategies to reduce costs and risks, you have given one of the more practical applications of Big Data by giving the examples of how Amazon used Big Data to connect with consumers and also how Google is using it for search predictions. You also talked about how the education industry has used it to benchmark. Would you like to share some of that?
Niraj Dawar: The questions that people keep asking about Big Data tend to be technical questions. For instance, how do we analyse, store and consume Big Data, etc. I think the strategic question we need to ask is what value does Big Data add to our customers. When we begin to ask those questions, we realise that applications of Big Data are far simpler than the technical problems. For example, when you log on to Amazon, it can predict what kind of book you would buy based on the fact that it has access to 180 million customers and their purchase history. Based on this data, it knows the type of customer you are. It can predict your product preference and what kind of price you would pay for the product. Big Data can be even simpler than this. For example, the fact that people post reviews of products and books on Amazon that other consumer can read is also a use of Big Data, wherein you are assembling information from consumers and feeding it to consumers who are likely to buy the product. This is a very valuable use of Big Data, which I have called ‘Relaying and Connecting’.
Vikram Sakhuja: What is your view on closed platforms such as iOS versus open platforms such as Android and their ability to aid in devising customer strategies?
Niraj Dawar: I think there are lots of pros and cons of open versus closed platforms. I think eventually open platforms will drive out closed platforms. However, the key to consider in a platform decision is always the network advantages. So, how many people are likely to use and continue with a platform; that decision can get technical very quickly.
Vikram Sakhuja: What is evident to all of us is that first to market necessarily does not mean first to mind. Why is it that brands who go to mind first do better than first who go first to market?
Niraj Dawar: An example in this case would be Pampers, which was not first to market. The brand that was the first to market in diapers was Chux by Johnson & Johnson. But we have never heard of Chux because Pampers was first to mind. Companies which are first to mind are much more likely to have used mass marketing. They are much more likely to form key criteria of purchase. Pampers was the first to create the purchase criterion of absorbency and has occupied it for the last 40 years.
On the other hand, Chux was introduced in early 1960s as a solution to the problem that your gas tank was larger than your baby’s bladder. In other words, you could drive long distances on the interstate, but you would have to stop if you didn’t have diapers for the baby. The solution that diapers were supposed to fulfill was that you can continue to drive for longer distances. It was a product that was associated with the highways. That was very niche use of diapers. It was Proctor & Gamble that took diapers to the mass market and got the criterion of absorbency associated with Pampers. That was what made the difference.
Vikram Sakhuja: But Viagra was first to market and first to mind. It still managed to find a competitor in Cialis. How is that?
Niraj Dawar: Just because you are first to mind does not mean that you have a perpetual monopoly on the product category. When Cialis was launched, the erectile dysfunction (ED) market was very attractive because Viagra had become a $1.5 billion product within 3-4 years of its launch. Competitors wanted to get into the market. What happened was that Bayer developed Leivitra, but launched it as a ‘me too’ product with a slightly lower price tag. Cialis changed customers’ criterion of purchase. It was no longer the effectiveness of the ED drug, but the much longer window that the product promised – you take the drug and you have a 36 hour window, is what Cialis promised. Thus, Cialis changed the criterion of purchase from effectiveness to duration. That is what made the difference. They changed the game.
Vikram Sakhuja: In all your research across four continents, have you looked at any Indian brand or company which you found was forward facing, concentrating on the downstream and customer-oriented? Who is doing it right over here?
Niraj Dawar: I think there is a lot happening here. To give an example, a few years ago, I came across United Phosphorus. I was talking to Jai Shroff at UniPhos based in Mumbai, who told me that that they sell phosphorus to farmers. But often the farmers are not able to afford the application equipment. So, the company talked to retailers, who would buy the application equipment and rent it out to farmers. Thus, they designed a business model to rent out the application equipment to farmers along with phosphorus. Remember, they are in the phosphorus business, but they are now developing rental schemes and capital leasing. Then they realized that retailers still didn’t see the business model as effective unless they were able to get loans from banks to buy capital equipment. Therefore, United Phosphorus got the banks involved and developed a business model, wherein banks would lend money to the retailers, who would buy the captail equipment, which was in turn sold to the farmers. Thus, they developed an entire business model in the downstream.
Vikram Sakhuja: I truly got a lot out of reading your book ‘Tilt’ and found it very useful. I say that because I am in an industry which has been accused of a fair degree of commoditisation. So, if we have to differentiate and get more value going for us, I think that there is a whole lot of ‘tilting’ that we would need to do.
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Social Beat wins SEO mandate of Tata CLiQ tag rss
The account was won after a multi-agency pitch
e4m e4m Social Beat has won the SEO mandate for Tata CLiQ, one of the fastest-growing omnichannel marketplace in India. Social Beat has been entrusted with optimizing existing content, as well as launching new, optimized category pages systematically on Tata CLiQ’s platform to scale monthly organic traffic by 2x over the next year. The account was won after a multi-agency pitch and will be serviced by Social Beat’s offices in Mumbai.
Shishir Kataria, Director - Marketing, Tata CLiQ, “Shoppers, e-commerce or otherwise, continue to heavily rely on search and discovery throughout their shopping journey, be it engaging with the latest fashion trends or hunting for the best buys. No wonder a platform's ability to be a part of this journey organically drives significant consideration for it amongst potential shoppers. We, at Tata Cliq, are confident that Social Beat will help us develop and optimise content that is highly discoverable to grow our engagement and revenue. Our goal continues to be to drive more and more shoppers to our platform with optimised and curated products and relevant content.”
Vikas Chawla, Co-Founder, Social Beat said, “We are thrilled to partner with Tata CLiQ in their growth journey. We aim to scale traffic to the Tata CLiQ platform manyfold over the next year. Our team of specialised SEO and Content strategists will be working closely to achieve this”
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ShareWill OOH dazzle this festive season?
As the celebrations begin, experts tell us the trends and challenges for the OOH sector this season
Be it the flower-clad taxis in Mumbai for Made in Heaven Season 2 promotion or Zomato’s ‘kheer mangoge kheer denge’ billboards, India's OOH advertising sector has undergone substantial transformation and expansion in the recent years. Even though the medium was severely hit during the pandemic years, it has now managed to rebuild its status. Now, with the onset of the festive season, elections and the cricket world cup, OOH is expected to see more and more advertisers come on board.
Amarjeet Hudda, Chief Operating Officer, Laqshya Media Group, believes most of the clients spend a lot of money during the festive season, especially for Durga Puja, Dussehra and Diwali, targeting their customers in a festive mood. The categories that spend heavily during these months are Auto, Consumer Durables, Real Estate, Organised retail, and E-commerce.
According to Dipankar Sanyal of Platinum Outdoor, there was a huge surge in the festive season last year, and he expects the same this year too. “Last four to five years have turbulent for outdoor. It was picking up in 2019, but then Covid came and everything went flat for two years,” he mentioned.
According to EY-FICCI’s M&E Report 2023, OOH media grew 86 percent in 2022 to Rs 37 billion. The value includes traditional, transit and digital media, but excludes untracked unorganised OOH media such as wall paintings, billboards, ambient media, storefronts, proxy advertising.
Sharing the brand’s perspective, Shivam Ranjan, Head of Marketing, Motorola-APAC, said, “We are going into this festive season with a strong mix of media, including OOH. Within OOH, we are focusing on digital OOH, due to its capability of programmatic serving, measurability, and near real-time insights that allow us to be agile with the communication and optimisation of our campaigns.”
With urbanisation, improved infrastructure, rising consumerism and an increased spending power, clients' expectations from OOH advertising too have evolved. “The clients expect better ROI on every investment, best in class innovations, tech-led planning and execution. Today, technology plays an important role starting from planning the campaign, to measuring metrics to ROI,” Singh explained.
Another trend that Sanyal has observed is that traditionally advertisers looked at spending on OOH nearly two weeks prior to the festivities, but now, most advertisers have now started advertising a week earlier so that they can get maximum eyeballs. Additionally, the digital OOH advertising (DOOH) has also emerged big. The digital OOH screens increased to around 100,000 and contributed eight percent of total segment revenues.
“Now with digital, there is more space for advertisers to come in one frame. Because of this, you can see it is getting more attractive. The innovations too are coming in at a much lower cost and creating a greater impact,” shared Sanyal.
The only challenge with the medium, according to Ranjan, is OOH being a fragmented industry with lack of measurability and agility. This becomes a serious issue for ROI-centric brands. However, the growth of DOOH, which is dynamic, agile and measurable, is giving marketers the confidence to invest in the medium backed by relevant data and outcomes.
Adding to this, Hudda highlighted that availability of good media spots is the biggest challenge in this season as media assets are limited and demand is very high. Due to the gap in the festive season, many clients are not able to fully optimise their campaigns. Rather sometimes, clients are even compelled to divert their budget which adversely impacts the industry, he shared.
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Banking on positive consumer sentiment: BFSI optimistic on doubling festive AdEx : Cache
Some categories within the sector, however, may spend more in the quarter that follows the festive season
The BFSI sector is expecting a surge in demand for loan during the festive season and is looking at increasing its ad spends to cash in on the celebration spirit. Industry leaders say they are hopeful of witnessing a good growth in the number of applications for auto loan, home loan, credit card and health insurance during October, November and December due to positive consumer sentiment this year. However, though most of the BFSI players are planning to double their advertising budget this time compared to the previous year, there are some who are not investing too heavily on marketing during the festivals as they plan to save the money for the fourth quarter.
According to Shailendra Singh, MD & CEO, BOB Financial, they witness incremental growth every year during the October-December quarter, and they anticipate an increase in consumer spending as well as new enrolments for cards this year too. “There remains a surge in customer demand for credit during the festive season,” said Singh.
Singh shared that the company is fully geared up for the launch of #FestiveShoppingRewards on all Bank of Baroda credit card variants under the theme ‘Reimagine Festivities’. They would kickstart festive offerings with the start of Navratri.
The festive season does not just see the demand for credit go up, but there is an increase in applications for health and motor insurance too during this time of the year.
Aabhinna Suresh Khare, Chief Digital & Marketing Officer, BajajCapital Ltd, shared that among insurance products, health insurance and motor insurance reign supreme during festivals. According to Khare, the demand for mutual funds and SIPs too sees a hike.
“Overall, the festive season presents an opportune moment to secure insurance coverage. A plethora of attractive products and services are on offer, with financial institutions extending special discounts and promotions to entice new customers,” said Khare.
The company launched #BlessMeGanesha campaign during Ganesh Chaturthi. “Our goal for this festive season is not only to provide financial solutions but also to create memorable experiences and deepen the connection with our customers,” said Khare.
Though all major sectors spend heavily on advertising during the festive season, within the BFSI sector, some categories spend more in the quarter that follows the festive season.
Explaining the trend, Samir Sethi, Head of Brand Marketing, Policybazaar.com, said that the festive season has varying impacts on the BFSI sector. In the banking sector, for instance, the demand for loans surges as many individuals purchase items and undertake home renovations. Conversely, in the insurance category, the festive season doesn't result in significant changes. Instead, the insurance industry experiences its peak season after the festive period, particularly during the fourth quarter of the financial year.
“As the festive season approaches, there is a noticeable increase in car sales though, leading to a surge in the demand for motor insurance. Consequently, we see a significant uptick in the requests for motor insurance policies. During the festive period, there is an upswing in demand for various categories, such as electronics. However, in the insurance sector, this period doesn't significantly affect us, so we don't run specific campaigns targeting festivals. Nevertheless, we do roll out multiple campaigns throughout the year, and some of them may coincide with the festive season,” said Sethi.
According to the TAM AdEx report on BFSI sector across media for H1, the advertising volume of the sector grew on TV, radio and digital, but declined in the print medium. The report indicated that ad impressions on digital saw 91% rise during Jan-Jun '23 over Jan-Jun’22. The increase was 32% for radio and 4% for TV. The ad space of the BFSI sector decreased by 7% in print.
Speaking on media mix, Singh shared that BOB Financial has a good mix of customer segments belonging to Tier I, II and III. So, understanding their needs and preferred form of media channels, the company will reach out to them through relevant media promotions. “For the easy discovery of our offers, we shall have a dedicated offers page with regular promotion of top offers on our social media and other digital channels,” said Singh. Without disclosing the figure, Singh shared that the company’s promotion budget has surely increased from last year and it will be visible through their multi-channel promotional activities.
According to the TAM report, in the BFSI sector, life insurance is the leading category on TV and radio whereas mutual funds is the top category on digital.
Khare highlighted that in recent times, Bajaj Capital has observed a significant growth in audiences on online platforms and the changing preferences of their clientele. “This observation led us to recalibrate our marketing approach, placing a heightened emphasis on digital avenues,” said Khare.
He further added, “Our promotional efforts are primarily digital-focused, accentuating areas like social media engagement, search engine outreach, content-driven marketing, and targeted online advertising. As we approach the festive season, we've fine-tuned our online approach. By harnessing the insights from data analytics, we aim to grasp our clients' needs and inclinations better, ensuring our content is both tailored and pertinent.”
Khare also mentioned that Baja Capital has doubled its advertising budget compared to the previous year.
“This increase in our ad spend signifies our confidence in the opportunities this festive season presents. This impressive surge in our budget allocation underscores our dedication to maximizing the potential of this festive season and driving significant expansion within our business. We firmly believe that this increased investment in advertising will not only elevate our brand presence but also lead to an exceptional uptick in customer engagement and sales.”
For Policybazaar.com, the media strategy primarily involves a blend of television and digital platforms, an approach that has remained consistent in recent years and is expected to continue in the foreseeable future.
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OMD appoints Dileep Raj Singh as Head of Digital for APAC
Singh will report to Charlotte Lee, CEO of OMD APAC
OMD has added a Head of Digital (HOD) to its Asia Pacific (APAC) regional leadership team with the hiring of Dileep Raj Singh.
Singh is a digital native and brings with him a wealth of experience across product, media agency and client side in APAC, North America and the United Kingdom. His last 10 years have been spent building diverse digital marketing teams covering areas like performance marketing, digital media planning, ad/martech, product marketing, branding and measurement.
As HOD, he will accelerate OMD’s digital leadership agenda, rooted in helping clients address their business challenges and digital ambitions. He will be supporting OMD’s local teams in APAC on operational excellence, and digital transformation frameworks and roadmaps; and the development and implementation of our digital leadership agenda. He will also be working hand in hand with both our regional and global networks to initiate complementary workstreams for our clients in APAC.
“We will continue to invest and win in digital as part of our wider goal to be our clients’ most trusted business transformation partner,” said Charlotte Lee, CEO of OMD APAC.
“It is our global ambition to continue our leadership position in digital, data and technology. In line with this ambition, we are excited to have Singh come on board the OMD APAC leadership team. His background of agency, in-house and start-up experience position him perfectly to understand and address our clients’ business needs,” added Lee.
“Digital media and access to our audience, as we know it, is changing quite rapidly around us. This puts most of us in a delicate but remarkable position, a position from which we can shape and contribute to conversations about the next evolution of digital media. As we embark on this journey, I want to leverage the strength of the OMD network – people, technology, data, tools and platforms – to help our clients pivot and navigate through all the new and evolved possibilities in digital media. With this, I aim to position OMD as an unrivaled partner for our current and future clients; to dominate and succeed in this incredibly competitive and multifarious digital realm,” said Singh.
Singh will report to Lee, and work closely with the team including Chief Strategy Officer (CSO), David McCallen, and Chief Client Officer (CCO), Sadhan Mishra, to drive and support APAC local markets as well as regional clients on digital, data and technology needs.
Mishra was promoted to CCO of OMD APAC recently in June 2023. He will continue to be CEO of OMD Singapore, a position he was promoted into last August. Mishra has been with OMD for over 13 years and in his concurrent new role as CCO, he will focus on key client relationships, understanding their business needs and ensuring we remain a critical partner on their transformation journeys.
McCallen was elevated to the role of CSO of OMD APAC in April 2022, and was previously the CSO of OMD New Zealand for five years where he helped the agency to attain the top place in the market for new business, overall billings and award wins. Since starting in the APAC role, his focus has been on connecting and elevating strategic best practices across the region, building capabilities across a range of strategic outputs, and supporting new business growth both regionally and locally.
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Chandrayaan 3: Brands over the Moon
Some of the best moment marketing posts on India's crucial lunar mission
The nation is in a celebratory mood with its moon mission Chandrayaan 3 making its smooth landing on the lunar surface on the evening of August 23, 2023. The Pragyan rover is in pursuit of discovering water on the moon and is a vital feat for India's ambitious space research.
To celebrate this momentous episode in Indian space research history, netizens have taken to the internet to express their excitement, hopes and fears for the nation's lunar mission. Joining them are brands who have crafted creatives to mark the historic occasion and capture the emotions of the nation who have their eyes set on the moon. Here is our pick of some of the best Chandrayaan 3-moment marketing posts.
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BCCI rakes in Rs 4670 cr in Women's Premier League team auction: Jay Shah 26 Jan
WPL has broken the inaugural auction record of Men's IPL in 2008, tweeted Shah
As expected, Wednesday turned out to be another historic day in Indian women's cricket with BCCI having a windfall gain of Rs 4,600 crores by auctioning five team franchises for the first season, a higher sum compared to what men’s IPL franchises offered to the cricket body during the launch in 2008.
Adani, IndiaWin Sports, Royal Challengers, GSW- GMR cricket and Capri Global have won the bid, BCCI secretary Jay Shah tweeted.
Shah shared in a series of tweets, “Today is a historic day in cricket as the bidding for teams of inaugural #WPL broke the records of the inaugural Men's IPL in 2008! Congratulations to the winners as we garnered Rs.4669.99 Cr in total bid.”
“This marks the beginning of a revolution in women's cricket and paves the way for a transformative journey ahead not only for our women cricketers but for the entire sports fraternity. The #WPL would bring necessary reforms in women's cricket and would ensure an all-encompassing ecosystem that benefits each and every stakeholder.”
“The @BCCI has named the league - Women's Premier League (WPL). Let the journey begin…”
The country's top corporates had bid aggressively for the league. Over 16 groups including IPL franchise owners, Adani group, Torrent and Haldiram were believed to be in the fray.
Given the popularity of IPL in India, the event is touted to be a big draw for all stakeholders involved.
The BCCI was reportedly expecting ₹4,000 crore gain through team auction.
It’s noteworthy that Viacom18 has won the Women's IPL media rights for Rs 951 crore for the next five years creating euphoria around the league whose first season will be held in March.
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