Tag Archives: colloquium

Insights on Making Strategies: In Conversation with Shireesh Joshi

Mr. Shireesh Joshi (ex-COO, Strategic Marketing Group at Godrej) was a guest speaker at Colloquium, the annual business conclave organized at IIM Indore. He shared his experiences in the field of strategy from organizations like Godrej, Airtel, PepsiCo and Procter & Gamble. Mr. Shireesh also discussed how to create an appropriate sustainable advantage and position a product in the value chain. After the engaging talk, we caught up with him for a short interview-

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Sonali- You discussed about creating sustainable advantage. How important is it to keep updating that sustainable advantage, keeping in mind companies like Blackberry and Nokia and how to do that?

Shireesh-Your examples prove how important it is to keep it updated. Updating the sustainable advantage is actually a matter of life and death for companies. The point worth noting is that if there is anything you need to update, it has to be in your area of sustainable advantage. This is because, if things get updated in your peripheral areas, they don’t hurt you but if things get updated in your core area and you are not part of that, then you get outdated almost instantly. So, you have to be leading the effort of updating the core area of your strength all the time.

Sonali- Sometimes when the sustainable advantage is lost or is flawed, when should a firm go for rebranding and how should it be done?

Shireesh-I think whether you do rebranding or not, it should be led from a consumer’s standpoint. So, if you feel that over a period of time, what your brand is and what it stands for has started to become a little bit distant from your target consumer and it is not possible to do activities to bring it closer, then sometimes, one way of making a significant change, signaling that change and recreating a fresh relationship is rebranding. But, it must first begin with the consumer and for whatever reasons you do rebranding, make sure to define, in what terms is the new consumer different from the earlier one and in what way their aspirations and expectations are different from the earlier ones. Also, make sure that the brand that you now craft is much more suited to these new aspirations than it was for the earlier ones. A loose description can be let’s say my parent’s generation, they bought stuff that they wanted to last their entire lifetime and they did not expect it to be replaced. Then came our generation, who might want to replace stuff. Next, may be your generation would not even own it, everything might be leased. So, there are very different mindset. As those mindsets and preferences change, then brands must evolve. For example, if I want to replace things frequently then I don’t want to pay for something that is going to last 30 years. So if you tell me that this thing will last 10 years and it costs 100 bucks and another one will last 30 years and it costs 250 bucks, I don’t want the second one although I can see it being justified. So then, the brand will have to go for rebranding because the long lasting quality in itself is going out of fashion. So you have to keep looking in what way the consumers are changing, their needs are changing and then create the brand. In addition, make sure that the new avatar that is created, is in conflict with the earlier avatar, then only you should rebrand. It should not be done just to correct the declining sales.

Sonali- So, when we talk about updating and accommodating change, another thing that strikes me is the usual saying of ‘Fast eats big’. It is because new and smaller firms are more flexible than the old and larger ones due to more complex organizational structure. How does a 120 year old company like Godrej manage to stay flexible and relevant?

Shireesh-So, first of all Godrej has been very careful of not having a centralized organizational structure. There are individual divisions and decentralization. So each division of company is managing one kind of business like Godrej Property handles property business, Godrej Appliances is the appliance business and so on. Then, they look at where are the synergy areas, say if there is a synergy in buying, so when they are buying, they will buy for multiple businesses. So it has been purpose built and should not be just for the sake of managing operations of a large business. The good thing with Godrej is the multiple family members involved who are able to cover all ground of operations between them, without really creating a structure. So, each team is competing with its competitors but that does not mean all divisions have been good at doing that. But the reason that such divisions have not faulted is that they are not centrally structured.

Sonali- Coming back to the strategies, why is it that the same strategies work for some firms and not for others in the same industry? This is in reference to the deep discount model that failed for Snapdeal while it seems to be working for Flipkart, to some extent.

Shireesh-Yes the operative word is ‘seems to be working’ because discount is not really a strategy. It is only for a temporary period during which you can use that to lure customers but you can’t keep giving discounts forever. There is a reason why margins are what they are because that is what make them sustainable. For a period, you can dip into those margins in order to attract customers but it cannot be a strategy because strategy requires you to be able to sustain those margins. Now if you have found a way of doing business that is, let us say, take 5 points of operational costs out, in that case you might be able to consistently beat others till somebody finds a new system that beats yours. But if that is not the case and all you are doing is simply taking products and assuming you might have some efficiency in operations. But efficiency in operations cannot explain the kinds of discounts you see in ecommerce market place. So these are unsustainable and that is only taking place because there is VC funding that is available for the purpose of customer acquisition and building a customer base.

Mr. Shireesh Joshi is the CEO and Principal Consultant at Priism Consulting. Previously, he has held position of COO, Strategic Marketing Group at Godrej and other key positions at PepsiCo and Procter & Gamble. He has a diverse experience in various fields across India, China and South East Asia, among others. He completed his MBA in marketing from IIM Bangalore and B.Tech from IIT Kanpur.

The mantra of digital marketing and e-commerce – an interview with Hitesh Malhotra, CMO, Nykaa

A UC-Berkeley Alumnus, Mr. Hitesh Malhotra (Chief marketing officer, Nykaa) visited IIM-Indore on 29-July-2017 for Colloquium, the Annual Business Conclave of IIM Indore. The theme of this year was “The Strategy Spectrum” and Mr. Hitesh spoke about India’s premier beauty and wellness portal – Nykaa.com and what differentiates it from other e-commerce players. We caught up with him after the talk, for a small interview. Here is what he had to say about e commerce, Nykaa and digital marketing:-

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Nishant: How did you get into digital marketing and what interested you in digital marketing?

Hitesh: I was in brand marketing first and digital wasn’t big enough in 2005 when I finished my engineering, and I was focusing mainly on the retail marketing, but then something very weird happened. I was in a mobile company and then suddenly we realized that the return on ads that we are getting just out of one simple Google ad were 10 times cheaper and stronger than what we were getting in the retail. So we thought that if one small Google ad can make such a big difference in terms of return on ads spent then how big it will be if we scale all of this together, so then I got interested into the science and got deeper into it and realized that in next 10 years digital marketing will lead the race of marketing.

Nishant: According to you, what will be the impact of GST implementation on Nykaa’s Sales?

Hitesh: There could be a little period, till the time, people are used to pay certain taxes, on certain line of products, some products will be benefited, some will stay where they are in terms of pricing, some product pricing will increase, but eventually people will understand that they are getting benefited some way or the other. They might be paying more for a beauty product but they are also paying less for eating out in restaurants. Once they get their expenses balanced, it will be neutralized.

Nishant: Do you plan to acquire more number of male customers or go into the male segment too?

Hitesh: That’s not my business model. I am focusing on women customers at a larger scale and I want to stick to the core only.

Nishant: Are there any advantages of conventional marketing over digital marketing?

Hitesh: Both have their own strengths, conventional marketing has a very good ability, you can talk good stories about a brand, and you can build brands very strongly on offline marketing. The benefit of digital marketing is that the results are measurable whereas in conventional marketing, you have to work through different methods to arrive to a result and that too could have a high level of inaccuracy.

Nishant: What are your favorite tools related to digital marketing?

Hitesh: I think the best are analytics tools; either you work on Google analytics or Omniture Adobe. After that I would say, the typical marketing efficiency tools or the typical digital marketing outreach tools like Facebook marketing, Google AdWords are my favorites.

Nishant: How do you see the future of digital marketing? What trends do you foresee?

Hitesh: The trends are already here, every day the future is shaping for digital marketing. A lot of platforms are coming, and every platform has a new science around it. Earlier TV was the main media, then it moved to Youtube and now it has moved to OTT platforms like Amazon Prime, Netflix and Sony liv or Voot. I think new platforms will keep on emerging and with every new platform, there will be more consumption digitally.

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About Hitesh Malhotra: He is a UC-Berkeley Alumnus, and has held roles in strategy formation and all level analytics at Levi Strauss, USA and best in class engagement practices with MakeMyTrip.com. He excels in performance marketing, integrated communication and engagement strategy for brands. As Chief Marketing Officer at Nykaa.com, he spearheads digital, main line and customer relationship marketing -controlling 20% P&L at organization level.

Know Your Audience – An Interview with Mr Avinash Janjire of Thomas Cook and Future Generali

Hiral Arora reports from Colloquium, the annual business conclave of IIM Indore organised by Industry Interaction Cell, talking about how to be an all round marketeer with a one to one interaction with Mr Avinash Janjire who has been associated with Future Generali and Thomas Cook travels.

In an awe-inspiring talk and lessons from his personal life, Mr Janjire took us through some interesting marketing campaigns from his work experience. As a context of his work in the Insurance sector, you might like to check this video explaining the Insurance Week Campaign, that resulted in breaking of the Guinness World Record for the Longest Balloon Chain.

 

Additionally, as a context for his work in the Tourism sector, you might want to check out the following explanatory video for Thomas Cook’s innovative Holiday Savings account scheme.

 

Hiral: As a marketer, how did you manage to work in two completely different product segments – Tourism (an extremely glam industry!) and Insurance (hard to sell, boring industry)?

Mr Avinash Janjire: I believe the experience doesn’t really change. As long as you understand the consumer and their needs, the industry doesn’t matter. You need to have the knack of understanding the consumer, the industry you can learn. Tomorrow I might join some other industry, except engineering perhaps, like an FMCG, and it won’t really make a difference. That’s the key.

H: When you portray Thomas Cook holidays as an affordable brand, does it not dilute the premium image it has right now?

A: That’s really a misconception. We have been here for about 150 years and people think that we are very expensive, but we’re not really that expensive. That’s because the product is such. We have holidays starting at ₹20000 also. But its just that the premium image comes because we sell a lot of these long haul holidays to Europe, US – which are expensive. This makes people believe that ‘this brand is not for me’.

If you compare us with any other competitive brand in the market like makemytrip or SOTC, we are at par in terms of price, we are very competitive. So while we have this premium image, we don’t complain about it, but it is not necessarily true. We are trying to change this idea because otherwise we limit ourselves to a very small segment of holiday goers. We want to go to middle India which has increasing aspiration for travel, beyond the 6 million people who already travel with us, and increase the size of the travel market base. 40% of our business comes from small towns. People want to go for holidays but price is a barrier. We want people to think that we are good but competitive. Not cheap, but competitive.

Right now people don’t even walk into our stores, thinking English naam lag raha hai (this is a fancy sounding english name, not for us!), otherwise they would probably go to some Kesari travels, something more localised. We want to appear approachable.

H: Is tourism a margin play or volume play industry?

A: Earlier it was margin play, decent money, but now it has become very very competitive. Now the margins have decreased to some 5-7% which is very less compared to the transaction value that we do, so it has actually become largely volume play.

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Mr Avinash Janjire at Colloquium’16, IIM Indore

H: In the insurance sector, how do you manage to make people buy (life) insurance and get past the mental block that they don’t need insurance (because noone wants to believe they are going to die!)

A: People right now buy insurance but not for the right reasons, they buy it for tax saving reasons and just look at the short term benefits so they end up buying the wrong instruments.

Most people don’t understand finance and can’t understand how much they have to pay and what benefits they can get. So the end up buying from agents who they know – such as family friends.

We have installed this mechanism of calling back customers who have bought insurance from us from the center. This is because we don’t know how the agent sitting in say, Indore, has sold the insurance. Once the deal is locked we call the customer from our head office, and there is a central unit which does this, to rectify what the customer has been told, like a welcome call. Questions like “Do you know what policy you have bought?” “Do you know what you have bought it for?” are asked so we know if it has been missold or not. This is because misselling is very rampant in the industry, leading to lack of trust.

Misselling happens because everyone has to complete targets. You need something, but I might not actually sell you something that you need. I might sell you something that gives me more money. There are some policies that make more money, some have a higher commission as compared to others, so I might want to force sell those. This problem exists because of these freelance sellers, most of whom are not our employees, they work for multiple agents. Most companies are trying to solve this through such back checks. However it is still not optimal.

When we are recruiting  we train them in a way that they do the financial probing correctly. In our forms we have questions asking if they have done proper probing or not.  What does the customer need money for – retirement, children’s educations, children’s marriage? Once we have that financial information and the customer profile, we can have an idea whether what they have sold is correct or not. This isn’t foolproof but it gives us some assessment, some idea as a brand. It is important to sell the correct policy because if I sell the wrong one, the customer won’t renew it for a second year, which is when I will actually start making money. The company makes money only in the 3rd and 4th years, for the first 3 years we actually lose money.

H: Thank you for the insights! To conclude, would you like to give a message to marketing and advertising aspirants?

A: Just focus on understanding your consumer and the results will follow!

This article is part of our Colloquium’16 series (Marketing – Strategy, Science or Sorcery) 

Rural Marketing Insights from ITC’s Business Development Manager, Rajeev Arora

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Mr. Rajeev Arora (Business Development Manager, Rural Marketing, Agri-Business Division, ITC Ltd.) recently visited IIM Indore as a speaker at the Colloquium organized by the Industry Interaction Cell of the institute. He spoke about ITC’s innovative e-choupal system, which is a unique combination of CSR and a rural penetration model. He sat down for a detailed interview with us, and here is what he had to say –

Darsheeka: Since the introduction of e-choupal 15 years ago, what do you think has been the shift in marketing approach when it comes to rural customers? Because, like you said, they are also shifting towards branded products.

Mr. Rajeev Arora: There are various kinds of shifts that have happened. Now, the consumer or maybe the end customer is more educated; they have various means of reaching out to their requirements; and people have started thinking about health, hygiene, education, and a better future for their kids. This has definitely led to a change, which is improving the quality of their life. They have also become technologically driven, as far as agriculture is concerned and ultimately, they are not the same kind of rural. The change has happened in every sphere of their life, and made them more educated and demanding.

D: As we know, the rural markets have not been doing well for FMCG companies due to drought situations and inflationary pressure. How has that affected the adoption of systems like e-choupal?

R: As far as adversity in any part of the country is concerned, the companies are not there to make profits, rather to support the system over there. There are a few product categories that are needed during emergency, and our approach has been to reach out to consumers so that scarcity is not there. As far as the ITC’s own Sanchalak infrastructure in the 4 states (UP, MP, Rajasthan, and Maharashtra) is concerned, it has always been a kind of support function. So, if anything positive happens over there, it is to be shared with the colleagues; and if something negative happens, there are ways to find out the solutions to overcome those issues.

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Source: Economic Times

D: Therefore, can we say that there is a predominant element of CSR in this initiative and it’s not just about rural penetration? If so, how does ITC balance between the two?

R: Yes, there is a heavy CSR element. The approach is not to go into a rural market and get business done; the approach has been empowering the rural people. This empowerment has come through various means – getting the right value for their agricultural produce, and providing them with facilities required for producing those commodities. So, whether it involves getting KCC (Kisan Credit Card) availed to them, securing them through life insurance policies, or educating them about how to avail weather-based crop insurance, these activities have always been done so that farmers are aware of what is good for their agricultural-related requirements. Beyond this, there are things not directly related to agriculture, but directly related to CSR. For e.g., health and hygiene of the females in the villages, employment generation, education of kids. Through these activities, ITC carries out a support function. Sanchalak is not working like a broker over there; he is a point of contact from the same geography as the people, present for support in agricultural as well as non-agricultural needs. This has definitely given us an advantage of deep rural penetration, and generating the confidence of the people in rural areas. So, this can be called a symbiotic approach.

D: Talking about the bottom line, do you think the investment in e-choupal is justified when we measure it against the increase in rural affordability?

R: Investment has been made over 15 years ago and it has given a different image to the company. Our Agri Business division has got strengthened in the rural areas. Perhaps, ITC is a company of its own size delivering results in India, and globally. Whenever our Food Business team comes across any new idea or are in the process of launching a new product category, they get back to us in terms of sourcing capabilities; this has only been possible because of e-choupal. Entering the rural market is not easy, and getting things done over there is also very challenging. The only advantage we have is our team member and channel partner, the Sanchalak; we support each other mutually in various day-to-day activities so that he can convince the villagers about what is good for them. The choice always lies in their hand.

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ITC Chaupal Sagar Rural Mall, Source: outlookindia.com

D: If I am not wrong, ITC has partnered with a competitor like Coca-Cola for this initiative. How do the dynamics of this unusual collaboration work out?

R: While talking about the platform of rural marketing, Chaupal Haat originated 7 years ago and we had a pool of partners who joined us. These included TVS, Maruti Suzuki, State Bank of India, and the rural-centric brands from ITC (Superia, Sunfeast) as well. The agenda was to have a network to support the brands with good quality and social value that want to enter the rural market, and get connected with the consumer. In this case, the cost of reaching out to the consumer would be justified since it would be a mutual effort. Your point is very valid. We have never been into tie-ups with direct competitors like HUL or P&G. In fact, as far as Coca-Cola is concerned, we have been supporting them since the past 3-4 years in getting their rural distribution more aligned and intensive. As of now, both this companies do not have the product category where there is a mismatch, or a common functionality. So, this collaboration is able to work. The rest of our partners include TVS, Mahindra Finance, and others. For rest of the product categories, the product is one that is needed in the rural areas but it is not possible to make that available from the house of ITC. So, it is a demand in the rural market that is currently not possible to be met through us, so why not help out other companies if it addresses the need.

D: You mentioned the words ‘Rozgaar Duniya’ in your session. Can you tell us about that in a little more detail?

R: It was an initiative wherein the Agri Business Division (ABD) got into a partnership with Monster.com in order to support rural youngsters through availing various employment options to them, related to their educational qualifications. Through Sanchalak, we supported a set of youngsters in villages to obtain job profiles such as security guards, mechanics, masons, carpenters, and others based on vocational skills. It worked well. Normally, in any of our support functions, the Sanchalak is a catalyst and does not need to go beyond a certain threshold. This is because he is also, ultimately, a progressive farmer. He has his own liability, family, and various business responsibilities. So, he should be in a support function wherein things happen on their own and he does not need to worry much. There has to be some kind of passion, such that not much of a push is required. Support is definitely there, but it should not be from a 0 to 100 kind of a thing; it should be lining around 75-80% from his end and the rest of the support will come from our team members.

D: As one last question, the impending challenge of rural digitization and digital literacy in rural areas combined with issues of electricity can be a test to the effectiveness and efficiency of e-choupal. How does ITC tackle this?

R: When e-choupal originated, there were certain characteristics that were attached to it. The most important one was reaching out to farmers in the villages, and letting them know prices prevailing in various markets to enable them to make better and informed decisions. We were giving them an opportunity wherein, if they were interested, they could come to our buying locations where we provided certain set of product features above and beyond the traditional mandis. That was the basic agenda. But, there was also other content they needed in their daily lives like information related to better agricultural practices, and health. Therein, limited content is telecast at the kiosk fortnightly or monthly. The villagers can come and watch that content there. In order to address the power issue, we provided solar panels when this system originated. So, power is not that big an issue. Anyway, over the years, technology has changed – people are using smartphones with freely available content in villages as well.  They have better connectivity with the nearby cities, or tehsil areas. It is no longer the case that they can only visit these areas only once a month, rather someone or the other from the villages visits these locations weekly to obtain information. So, access to information is not that tough now. Having said all this, there are various companies, organizations, and bodies that have a very fair way of trading. For example, the MP government is definitely doing a good job. So, there is a set of people trying to replicate our model after seeing our initial success, and doing a good job. In fact, more of such people are needed also. It is a win-win arrangement for everyone. We are not thinking just from our perspective and saying we have to be the only ones and the best ones. We are one of the good ones, but other players are also there. As a nation, we need more of such people.

This article is part of our Colloquium’16 series (Marketing – Strategy, Science or Sorcery)