|
|
    
|
TRIMILLENNIUM MANAGEMENT:
CUSTOMERS Don't Manage her, Make her By Sunil Alagh
First of all, companies have to start looking outwards. Gone are the days of introspection. Take the example of Hindustan Lever Ltd (HLL) which, in the 1980s, thought it was controlling a large section of the detergents market. What it did not realise was that the market was something it had defined for itself. It took Nirma's Karsanbhai Patel to show HLL that there was a huge market outside of what it presumed was the market. The same thing happened to us at Britannia Industries. We were happy addressing the upper-income segments of the market until we realised that there was a huge number of people who wanted to eat biscuits at a lower price. HLL got back with Wheel, and we did with Tiger. But those were times when we had the luxury of making mistakes and rectifying them. Nobody has that any more. A key challenge in the New Millennium will be the maturing of the mass market as the largest source of volumes and profits for all consumer product businesses. For all the hype about the New Indian Lifestyle, we have got to realise that this is a phenomenon limited to the upper-most crust of the society. The average Indian's lifestyle has not changed much. What has changed, almost across the board, is attitude. Now, even the low-income customer is more exacting and demanding of the products she uses. She is also far more aspirational. This is the opportunity for companies to woo her with products at prices that she can afford. For instance, anyone in the foods business who is not in the mass market will be marginalised to becoming a boutique food company in the 21st Century. A significant transformation is likely in the dynamics of the retail trade in India. As in most developing economies, the trend of retail concentration will gain momentum, and we will see the emergence of departmental stores and supermarkets. This will be a largely urban phenomenon. Even in the urban areas, the local kirana trader will continue to flourish given the fact that no supermarket can duplicate the kind of service he offers: credit, home-delivery, and phone-orders. If your vision of the market is the 6 metros, you should concentrate on the supermarkets and departmental stores. But if your market is India, the bulk of the revenues will come from the small trader, and distribution will be crucial. Across sectors, the conversion from commodities to brands will become significant. The value proposition will continue to be a critical parameter for both products and services. This will pose a tough challenge to the manufacturers of branded products. Consumers, given their exposure and heightened awareness, will expect global-quality products at Indian prices. Again, the rural market will be paramount as the customers there are now ready to shift from commodities to brands-all they need is branded products at the right price. Companies will also have to realise that they cannot be everything to everyone. They will have to stick to their knitting, but their area of perceived competence will be larger. While sticking to knitting for Britannia might have meant targeting only biscuits a few years ago, it now means targeting food and beverages as category. Companies will also have to look seriously at the profile of their competitors. At Britannia, we look at any food product as competition. For, we have to reach our consumer not just every time she wants to snack on another biscuit, but every times she wants to eat or drink. Period. Our vision is to make every third Indian a Britannia consumer by 2003. The mantra is: ''Eat any product you like, but make sure it is a Britannia product.'' If we can offer the consumer a choice of products and a range of prices to ensure this, we will have done our job. An important development in the consumer market will be the emergence of the newer, younger consumer. This consumer will be more open to trying new products, but she will also be more demanding and fickle in terms of brand loyalty. Successful brands will need to establish more meaningful and intimate relationships with their customers. They will need to continuously contemporise their brand image through sensitive research. Innovation in communication and media will assume greater significance. Better education and awareness will lead to greater health-consciousness too. Companies will be forced to sell products that are safe, hygienic, and offer consistent quality. We are likely to see a surge in favour of health-products. Even the low-income consumer will begin to opt for a healthy product. I believe that if you can convince a customer that he is getting a healthy, nutritious, hygienically-made product, he will bite, whatever the price. There will be more challenges for the Indian manufacturer. When the World Trade Organisation's regime comes into being in 2002, we will be competing with every competing product across the world that will be priced almost the same as ours. Market infrastructure will be brought in; the big players will bring it in, and the smaller ones will piggyback on it. A company will not be able to price products higher because it spent on developing the market-infrastructure-the consumer will not accept that. Technology, in the form of e-Commerce, will impact high-value products, but not low-value products-at least, not for the next 10 years. The grocer on the ground-floor of every Mumbai building is already offering the same service-there isn't a vacuum. There will be 3 kinds of companies in this millennium: the ones who make things happen, the ones who watch things happen, and the ones who wonder what happened. Only the first category will have any chance of making it. The old rule will change: it will not be the big who will swallow the small, but the fast who will outpace the slow. Success will lie in becoming a part of the customer's life. We, at Britannia, do not look at reacting to the New Millennium, but at creating it. And that is what anyone with any hope of succeeding should be doing. Don't just cope with the New Millennium. Create it. Vision it out. And then see what you need to do to get it right. Sunil Alagh is the CEO of Britannia industries
|
|
Issue Contents Write to us Subscriptions Syndication INDIA TODAY | INDIA TODAY PLUS | COMPUTERS TODAY © Living Media India Ltd |
 |
 |
At the outset, we need to establish that nothing earth-shattering
happened on January 1, 2000. Life went on as before. Still, the coming of the New
Millennium is as good a time as any for a manufacturer to take stock and re-evaluate his
business strategy, customers, and communication strategy. For, while January 1, 2000,
passed off just as December 31, 1999, did, the next 5 years are, certainly, going to see
sweeping changes, and every manufacturer will need to understand these changes and
reposition his business accordingly.