Its time to differentitate. Segment. Do some marketing!

Marketing is more than gaining market share and cannot be validated by this simple measure.

So, Mr. Jack Trout is in India this week. An apt time to talk of differentiation.

The Indian market is so fascinated by value at the bottom of the pyramid, that it is neglecting value everywhere else in the pyramid. I hope Mr. Trout will be able to motivate an improvement.

In fact, Mr. Trout will realize that Indian companies have no concept of segmenting.
Mr. Trout will realize that Indian companies misunderstand marketing and accept promotions and film star endorsements as marketing.

If India Inc has to enhance its presence in the world market, it must start to learn some lessons of marketing very quickly. The basics: Segmenting, Targeting, Positioning. The basics (4Ps): Product, price, place and promotion.

A Volvo that stands for safety. A BMW that stands for performance. Where are India’s equivalents of these brands? What does Airtel stand for? Does Mr. Bharti care?
What does TATA stand for in the car business? When will Mr. Tata think of this?
What does the Taj Group of Hotels stand for? How is it different from the Oberoi?
What does Kingfisher stand for? How is it different from Jet?
(Being different from IA is not so difficult. If your plane takes off and lands and has polite service on board, you’re already different from Indian Airline)

Gain in market share does not a great marketing company make.

India, over the past 5-7 years has seen tremendous growth. This growth has brought purchasing power to millions across the pyramid. Companies have aggressively targeted these new consumers. Indeed, new categories have taken off based on these emerging consumers. Retail/ airline/ mobile phones….you name it.

But as a marketer, I am interested in building brands. And the growth of the Indian consumer has not brought with it the growth of Indian brands. Why?

Before I answer that, let me site some recent conversations I have had:

My travel office asked me the other day which airline I would choose to fly between Bangalore to Puna.

My response: “I need to be there for 10am, don’t care who gets me there.”
They replied: “IA is always late.”
“OK”, I said, “anything but IA.”

This kind of conversation has happened elsewhere.


Admin to Venkat : “Which mobile sevice provider do you want?”
Venkat: “Whats the difference?”
Admin : “Nothing.”
Venkat: “Anything”

Here’s another: Grocery:
Wife to me: “We need to do our grocery shopping today.”
Venkat: “Where?”
Ritu: “Anywhere.”

Try this: Mobile phones:

Ritu: “ I want to buy one.”
Venkat: “Ok, which one.”
Ritu : “Nokia. What else?”

Why such lack of involvement in product categories that we are exposed to every day?

I submit the following:

1. It is easier to set sell. Setting up distribution network to make products available produces faster results. Especially in a market where products have not be available, and purchasing power is increasing. This is the case in India now.

Develop a product. Price is “for the masses”. Bring in a filmstar to legitimize the product and the brand. Make it available. From time to time raise prices based on “raw material prices”.

Servicing a “scarcity” situation makes quick money. And in the Indian context as penetrations are below 5% in most product categories costing Rs 5000 ($125) or more, this approach is likely to yield results for the short run.

2. However, marketing becomes important in a competitive market place. Where many brands fight for the same consumer pocket. This is not the case in India.

Companies are looking to deliver products to gain volume market share. Hence their entire segmenting approach is usurped by the “bottom of the pyramid” which determines the entire 4 P. And for this segment, price being the most important, each company is focusing on gaining volume market share at the lowest cost.

Leaving consumers up the value chain feeling completely abandoned.

The value in the middle and top of the pyramid are being neglected in the hunt for market share. (Which seem to drive, in the eyes of financial analysts, the overall firm value).

All short term thinking. And suboptimal for firm performance.

The consumer at the bottom of the pyramid drives service and product value definitions. Eg: a consumer using Rs10,000 of talk time per month is serviced by the same service network that addresses a consumer spending Rs 250 per month. Will he accept this for long? If ever given the choice of better service, he will shift. Immediately. Even for a price premium. Only when one has suffered poor service does one know the value of good service.

My bet is that in servicing the bottom of the pyramid, most Indian companies are exposing themselves to share loss at the top of the pyramid. Value share loss.

India Abroad:

The Indian market seems to lack entirely the concept of segmenting the market. And driving consumer loyalty through relevant promises made to each segment. Under this kind of marketing exposure, our dreams of establishing global brands will fall flat. Very hard.

Experience gained satisfying the bottom of the pyramid will be useful in other developing economies, but not in developed countries. Where consumers want products that are “made for them”. Where they can choose from multiple service providers . Once product penetrations increase, growth slows and you are faced with maximizing value per customer and enhancing consumer loyalty. This is where marketing develops.

In this market situation, producing and delivering goods is not sufficient. A “reason to buy” is key. And that comes from understanding that there are multiple consumer segments demanding many solutions.

A Volvo that stands for safety. A BMW that stands for performance. Where are India’s equivalents of these brands? What does Airtel stand for? Does Mr. Bharti care?
What does TATA stand for in the car business? When will Mr. Tata think of all this?
What does the Taj Group of Hotels stand for? How is it different from the Oberoi?
What does Kingfisher stand for? How is it different from Jet?
(Being different from IA is not so difficult. If your plane takes off and lands and has polite service on board, you’re already different from Indian Airline)

Consumers will force companies to dedicate resources to clusters of consumers.
To have one type of customer service for all consumers will be rejected.

Indian companies need not wait for the market to mature before they start investing in Marketing. They can and should start right away. Brands takes decades to be built and sustained.

Companies have to realize that the value at the bottom of the pyramid is not to be gained at the cost of the top of the pyramid. This is a luxury that companies in India are getting used to.
This may be good for the bottom line today, but it will definitely be a handicap when companies try to go global.

As a marketing professional I believe today’s bottom lines should not come at the expense of long term creation of company and consumer value.

Go on. Do some real marketing. Today.