The Hindu Business Line : When in Rome ...

ON a recent visit to hometown Delhi, I decided to regale my parents with my newly acquired South Indian culinary skills — and so went out in search of Dabur Hommade coconut milk, an essential ingredient for my stew. I searched high and low, to no avail. I asked for substitute Maggi Coconut milk powder, which was also not available. Some of the retailers hadn't even heard of the products, and one told me these companies don't distribute these products here. Now, in Bangalore, all (and I mean all) grocery retailers stock the product. In fact, I have often seen quantity purchase as well as premium (buy one packet, get a coconut free) schemes being run on the product.

So what does this imply? One, a lesson for any company wanting to get into foods in India: that the diversity in Indian food is utterly confounding; and two, a lesson in customising a company's marketing mix (in this case, distribution) according to geographies — the classical STP (segmentation/targeting and positioning) practice.

Culture and geography

If you were to look closely at the second of these postulates, it is really a question of culture, which Robert D. Buzzell in a 1968 article in Harvard Business Review defines as being a `convenient catchall for the many differences in market structure and behaviour that cannot be readily explained in terms of more tangible factors!' But seriously, culture affects all 4 Ps of the marketing mix, and in most cases spatial separation, or geographical boundaries, define cultural boundaries! So, marketing efforts are generally directed at defined geographic areas in an attempt to reach cultural differences — attitudes toward instant foods and spending money specially for expensive liquor, clothing, personal care items, tobacco, soft drinks, candy, and instant coffee; in television and radio usage patterns; and in eating patterns.

Product

Take product strategy to begin with. Examples abound, admittedly; many more when you look at international differences than in a single country, but amchi India is always the exception which proves the rule, isn't it? So, we see a senior marketing professional at LG telling us how in line with their regional concept (the feedback from area and district managers in the North-East and South-West zones) the company is making `regional required products.' Basically, the product team and the R&D team work on this together to make these `regional required products,' that is, `different products for different markets,' soon to be their biggest differentiator.

Actually, when you talk product, all elements including product presentation, positioning, branding and packaging are affected by consumer preferences and consumer purchasing habits.

According to Kotler, success is based on variation: not offering the same product everywhere. So products themselves (like the LG machines) can be different for different regions. Clearly, this is truer of categories more significantly affected by culture than others — food and apparel. Imagine a pizza that you and some friends are sharing. If you are an American, you probably want pepperoni on your pizza. However, in Japan, squid is the most popular topping; in England, it's tuna and corn; in Guatemala, black bean sauce; in Chile, mussels and clams; in the Bahamas, barbecued chicken; in Australia, eggs; and right here in India, tandoori chicken! Similarly, the first time I saw `Gobi Manchurian,' that interesting Indianised Chinese dish, was when I came down to Bangalore on a market visit some years ago. Forget China, even people in North India haven't heard of it!

Did you know that about three-fourths of the coffee produced in the country is consumed in the South? The per capita coffee consumption is 55 gm (as opposed to 620 gm for tea) but is vastly skewed: 240 gm per capita in South India and only 4-5 gm in the North.

McDonald's used to strive for uniformity around the globe. Now it adapts its products as appropriate — adding fried eggs to burgers in Japan and offering Samurai Pork Burgers with a sweet barbecue sauce in Thailand. However, its most dramatic changes were made when it entered India for the first time. So, instead of the all-beef Big Macs, the menu featured the mutton Maharaja Mac. We also saw paan-flavoured Wrigleys and hot and crispy KFC chicken only for India.

Just like I always take for my little nieces up North different designs of pattu pavade, for which in return my daughter gets gifted pretty bandhni or embroidered lehnga cholis!

In developing product strategy, the marketer basically needs to understand what needs this product or its modified version can fulfil in this culture. For example, bicycles and motorcycles serve primarily recreational needs in the US, but they provide basic transportation in many other countries. General Foods has successfully positioned Tang as a substitute for orange juice at breakfast in the US. However, it found that the French drink little orange juice and almost none at breakfast. Therefore, a totally different positioning strategy was used for France: Tang was promoted as a new type of refreshing drink for any time of the day.

Packaging gets similarly affected by geography. Coke had to withdraw its two-litre bottle from Spain because refrigerators there just didn't have the space to accommodate the bottle!

For branding, this regional difference can take many forms. A market may be highly concentrated, with one brand having a large share, while other markets may have numerous brands fighting aggressively. In India, apparel, edible oil, soaps, ice-creams, detergents, tea and fans are some categories in which regional brands are present. So you have a Chandrika soap or a Hamam, hugely popular only in some areas, or Vadilal ice-cream, only prevalent in the West.

Price

Culture affects consumer attitudes in shaping quality/price relationships. Consumers of differing cultures may use different cues or may use cues differently in evaluating product qualities. Though in the fixed MRP regime in India, you don't see evidence of it so clearly, some differences in the unbranded apparel market clearly show up: the same salwar kameez that you are willing to pay Rs 1,000 for in Bangalore will cost you not more than half that price in Delhi. In this case it can be argued that distribution costs are responsible and manufacturers are using geographical space as a source of differentiation. What then about the MOP (market operating price) phenomenon in durables? For the same washing machine, you pay a completely different price in Punjab as against Tamil Nadu (even if you were to subtract differences of taxes and other levies).

Place

But clearly, the most spatially relevant dimensions of marketing strategy are distribution and advertising.

One finds large differences in channel organisation, channel structure, channel length as well as inter-channel relationships across geographies.

Clear examples are the evolution of organised retail formats (the FoodWorlds and Subhikshas) in the South much before, and far more successfully than, the North and even to a certain extent, the West. Sure, cheaper real estate was a big reason, but far more important was the sheer difference in consumers and consumer needs which could be addressed through channel structure. Similarly, one would imagine that network marketing companies (Amway/Tupperware) are far more successful in the North and West of India.

Even traditional trade is very different, the North trade being meaner and dirtier, but more relationship-based than the West, which is more money- and ROI-oriented than the East, which is much more laidback, and the South, which is perhaps the most professional of the lot; this despite the fact that you see a common thread (the Marwari community) controlling most trade irrespective of geography. This even influences the skill sets required of sales forces managing particular geographies. The Delhi sales guy is perhaps required to be the `deal maker' while the Goa chap has to be more display- and distribution-oriented.

Traditional distribution patterns also differ across countries. In China, vanilla is considered a chemical and is sold in paint stores. Nutmeg, cinnamon, and some other spices are often distributed through Chinese medicine stores.

Promotion

The simplest manifestation of differences in advertising across geographies (apart from the famous `no — va' / `silver mist' kind of language gaffes) is seen in regional language or local media. Regional brands normally advertise in cost-effective media such as regional newspapers, cable TV options, radio and wall painting.

Branded atta promotions are far more hard-hitting and competitive in North India than in South India, which simply uses price promos in various forms. The reason? The South eats more rice. (Ah, food again!)

Similarly, the New Year Sales day, such a huge phenomenon in Tamil Nadu, indeed all of South for durables (till a couple of years ago some durables manufacturers saw as much as 40 per cent of yearly sales in Tamil Nadu occurring in the December-January month) is a promotion which no other region witnesses! So, an organisation with a significant presence in the South has to earmark special promotional monies (pricing as well as advertising) only for New Year sales.

Again, the question that the marketer needs to ask is: In what ways can we communicate product benefits in different regions? This question requires an investigation into available media, the needs the product fills, values associated with the product and its use, and the verbal and non-verbal communications systems in the culture(s). All aspects of the firm's promotional mix should be based on these four factors. It is interesting to note the bright colours Whirlpool uses for refrigerators it markets in Thailand and even India, as opposed to the pastels in, say, the US. This is based on the fact that many consumers in these countries keep their refrigerators in their living rooms (the kitchens are too small) and want them to serve as attractive pieces of furniture, not just as appliances.

Global or local

Basically, therefore, for a marketer, the critical decision is whether utilising a standardised marketing strategy in any given market will result in a greater return on investment than would an individualised campaign. Thus, the consumer response to the standardised campaign and to potential individualised campaigns must be considered, in addition to the cost of each approach.

The one anomaly in this cultural difference is the target segment of teenagers — today, one sees a global teenage culture fostered by the shrinking world. And this brings me full circle to an essential question: Isn't marketing essentially about aggregation? Implicit in the idea of a global or a national brand is the belief that different people will respond to a single offering in a similar way. As Levitt said, "Companies should operate as if there were only one global market since people are motivated by the same desires and wants." If that is true, this cultural argument seems to run counter to the very basis of the idea of branding. So, is there enough of a case for region-specific strategies, specially in India?

One would argue perhaps that the difference is in strategy vs tactics. People of different regions may like different things — but is the difference a fundamental structural one? So, to quote from a marketing expert, "Is the nature of convenience offered by a microwave oven different across regions? Is the value placed on the convenience platform essentially different? It is not sufficient that different regions have different cooking habits; unless these habits reveal a basic difference in motivations, different brand strategies may not be called for." That does not mean that no allowances need to be made for regional differences. At the tactical level, the recipes and instructions will differ. But at the brand level, different strategies would be called for only when there are differences in motivations of a fundamental kind.

Even Al Ries, in a recent interview, said that the way for a company to expand is to focus product and expand geographically, instead of expanding the product into other categories and destroying the brand. So, who is right? Kotler or Levitt? In balance, I would still see merit in a manufacturer in India recognising the disparities between different cultural groups and tweaking the marketing mix accordingly, but perhaps separating geographical divides from cultural ones. So, while yes, coconut milk doesn't get consumed by the North Indian, it might be distributed in North India to be consumed by the South Indian residing in North India. How about some stew, guys?

(The author is a Bangalore-based marketing professional.)

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