The Hindu Business Line : What the markets can teach politicians

THIS is not a column devoted normally to political commentary. Yet one has to recognise the fact that the world of markets, strategy and marketing actions that are central to its themes are inevitably affected by the world of elections. As I write, there is intense discussion on TV in the background - as to what the exact final tally will be, and why we have had the dramatic results, at least in certain parts of the country. We have seen one more instance of what politicians routinely acknowledge, once in five years, as the maturity of our electorate.

To say that the stock markets and industrial sentiment will react to the expectations from the new government is to say the obvious. Of course, the next few weeks and the first Budget presented to the incoming Parliament would tell us a lot about how the economy might shape up in the months and years to come. Beyond the superficial, however, is an intriguing issue: what can we as citizens-cum-consumers learn from the parallels between the conduct of competitive markets and the elections. Ironically, this is still true despite the strong opinion floating around that the single largest lesson of the election is that "markets are not the measure of everything."

Six months ago, nobody would have dreamt of forecasting the Congress thrashing the Vajpayee-led coalition. Few would have said that the Andhra Inc CEO, as he was called, would be swept out of office by a tidal wave of a protest vote from the hinterland, which must have surprised his most optimistic opponents. I see in these developments the same kind of situations corporate managers and those in charge of marketing brands have faced: despite all talk of herd mentality, the individual Indian is smarter than we give her credit for.

One clear commonality is that both politics and business have come to rely a great deal on the power of the spoken and written word and on the might of advertising, along with road shows and such other events. No wonder either that a small industry has grown around the very act of statistically forecasting how the shares of preference would move and why. The market and brand analogy per se is nothing new to the US, where a book with a cover resembling a carton of detergent was published many years ago called The Selling of the President.

In India, however, there are two interesting new twists to this. First, it took us a decade and a half to realise that the kind of overwhelming majority with over 400 seats going to a single party, as we saw in 1984, can never be dreamt of any more. Indeed, most would agree that it is a wonder we haven't realised this before. What we are seeing is far from any new-found fickleness or disruptive tendencies within the society, but rather a basic fact: India is at heart a coalition.

Our very diverse but still essentially not-too-dissimilar regions are a fact of cultural and social history, and geography. Multinational giants marketing consumer brands have long come to terms with this reality and learnt to not merely live with it but turn it to advantage. India is a coalition of markets, a rainbow-hued patchwork quilt with different levels of development and therefore very different stages of evolution in terms of needs, rather akin to Maslow's hierarchy. Thanks to mass merchandising and marketing, regional competition is not an aberration but business-as-usual. A second aspect is that over the past few years, the world of politics and administration had been moving closer in spirit to the world of advertising, branding and marketing. Partly this is due to the impact of cable television, which is now within reach of a majority - and probably three-quarters or more of the economically and politically active population whose votes matter in the elections. Therefore while the chattering classes, the media and political analysts can spin their new words, the people of the two Indias (or one India and one Bharat) make up their own mind. And do so based on their assessments, intelligently and remarkably independently.

Thirdly, another less obvious fact is that we now live in a far better informed society - better by orders of magnitude. Along with the debates and discussions in a variety of media, the sensitivity of even the poorest to national and local political issues has leapt beyond the imagination of the city-bred ruling classes.

Till recently, it was believed that we were a backward society because of illiteracy. Today, the first victim of the audio-visual media is illiteracy. In many States, it is no longer necessary for the ordinary low-income group family to be near a major urban centre to feel it is in the centre of things. Some two or three decades ago, the poor had to depend on the public meeting for all their information. Today the oratory of the most eloquent MP or his supporter cannot fool a voter who has access to radio and often TV as well - along with a choice of alternative opinions. Just imagine what it was like for many years before we entered the era of coalition politics: a single party that had admittedly charismatic leaders could expect to sway mass opinion through State-owned media and a succession of massive rallies and public meetings.

In other words, as public awareness has increased, it has become clear that it is no longer possible to win a mandate through glib clichés, any more than it is possible to win markets! While needs and wants may be common across the country, at the level of preferences it is a different story. This is what marketers have worked with for decades.

The fourth aspect of this extended analogy is a powerful and seldom stressed one. Marketing may be about perceptions, but to imagine that one can succeed by manipulating perception alone (ignoring the substance behind it) is either cynical or foolish. Thus clever devices, which are aimed at getting the consumer to vote with her wallet in favour of a product she finds to be less than value for money at the price, are at best a short-lived game. However stridently the confident publicist might proclaim, for example, that India is shining, each one of us has his own view of it sitting from where we are.

A spate of headlines about the IT-enabled sector, outsourcing and the new knowledge industries almost persuaded us that we have at last emerged on the world scene as a powerhouse in some areas. It was from there but a short step to convert that into an actual belief, so that the so-called "feel-good" factor became mistaken for reality.

Feeling good about something can easily trap us into thinking that everyone else is in the same frame of mind. The corporate manager has long been in danger of falling into this trap, as consumer product majors have repeatedly found to their cost. They have learnt the hard way that ultimately customers pay for value and performance: if they find someone reliable who can do so equally well at a lower price they will turn to the new offering, and become immune to all the blandishments of the big brand's advertisements. Regional differences in India can no longer be ignored in any walk of life - and competition is often very different in certain States despite the presence of national competition. This is a marketing truism that now applies to politics.

One remedy available to the intelligent competitive strategist in the corporate sector is also at times available to his political counterpart: this is to neutralise opposition by coalition, alliances or by buying it outright. Nonetheless, there is yet another trap in this - the people can desert the greatest of leaders if they think they won't serve the purpose or deliver what is needed at that hour. Remember Winston Churchill just after the Second World War?

(The writer is Director, Institute for Financial Management and Research, Chennai.)

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