The Hindu Business Line : `Marketers need to counter entropy with special energy'

FOR GOOD MARKETING: (From right) Mr R. Gopalakrishnan, Executive Director, Tata Sons Ltd; Mr N. Murali, Managing Director, The Hindu group, and Chairman, Advisory Committee of the Golden Jubilee Celebrations Committee, Advertising Club Madras; Prof Jagdish Sheth, Professor of Marketing, Emory University, USA, and Mr Ranju Kumar Mohan, President, Advertising Club Madras, at Advertising's Future Shock, an international convention held in Chennai on Saturday. — Bijoy Ghosh

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Chennai Jan. 20 Put anything in order and leave it alone, it will slowly tend towards disorder. Entropy — a flow from order to disorder — is a concept from physics, but the way the markets behave is the same, said Mr R. Gopalakrishnan, Executive Director, Tata & Sons.

Speaking on the theme "entropy in markets" at "Future Shock"— an international convention organised to celebrate its 50 years by Advertising Club Madras — Mr Gopalakrishnan said there were forces at play against each other in markets causing entropy. It is, therefore, the job of successful marketers to identify the "forces that dramatically intercept the natural entropy of markets" and influence and overcome these forces. "Special energy is needed to fight this entropy and that is what good marketing is all about," he added.

He noted that several such favourable forces were at play in the Indian markets. For example, he said, India's household expenditure on food as a percentage of total expenditure was rapidly coming down — from 61.1 per cent in 1950-51 to 51.1 per cent in 1990-91 to 38.2 per cent in 2003-04 (meaning Indians were spending more on non-food items.)

At the same time, both the savings rate of the Indian economy and private consumption expenditure (PCE) were high, Mr Gopalakrishnan noted. PCE in India was 65 per cent of GDP, compared with 71 per cent in the US, but Indians save a lot more than the Americans.

India is also the only country in the world where the number of retail outlets per million of population was growing. Over the last 40 years, India's population has doubled to one billion while the number of retail outlets trebled to six million.

Also, in many states in India (such as Tamil Nadu) the proportion of urban population was reaching the "tipping point" of 50 per cent. This augurs well for growth of the economy, because while initially economic growth might drive urbanisation, later it is urbanisation that propels economic growth, he said.

Fundamental shifts

Delivering the keynote address, Prof Jagdish Sheth, Professor of Marketing, Emory University, USA, spoke of the fundamental shift in client-agency relationship. Prof Sheth said there were several forces at work at the client end towards integrated communications for themselves while the agencies themselves were disintegrating. This has caused agencies to be stuck in the middle in an untenable position.

In his opening remarks, Mr N. Murali, Managing Director, Kasturi & Sons, publishers of The Hindu group of newspapers and periodicals, said the global advertising scenario was opening up new vistas for advertisers. "We are witnessing an explosion of media options and growing opportunities in retail advertising."

He noted that retail advertising was growing at a faster clip. Mr Murali said that conventional brand building methods have outlived their role and agencies need innovative and new ideas for brand building. "Use of technological advances will be the key to the future," he said.

Mr Murali also complimented the Advertising Club of Madras for being a "role model club", especially in content creation and coming up with creative and serious thinking sessions.