The Hindu Business Line : Brand shining ... for whom?

THE recent CII Brand Summit in Chennai seemed to have addressed the three constants in the world of marketing — changing brandscape, choices for consumer and brand-building principles. Two days and a score of speakers at this international convention on brand building drove home the key point of `deeply understanding the customer context.'

Nothing new, one may argue. The customer has always been a constant in any business. As marketing guru from Harvard Ted Levitt had said, "The reason for a business is to create and retain customers." But the fact has been that the marketing community at large has been more obsessed with itself and its competitors.

The battle turf or the marketplace usually witnesses product and price comparisons. Not surprising, such marketing warfare gave rise to terms like positioning, competitive advantage, strategic targeting and so on. And they still are important components of a marketing plan. The key performance metrics for marketers were market shares and brand equity. The customers were the means to their end.

The Japanese management guru Kenichi Ohmae provided a holistic perspective in his `strategic triangle' where the customers are the recipients of the value creation. Rama Bijapurkar also highlighted this in her session.

Every company asserts that its objective is to deliver value to its customers, be profitable and establish leadership in its core markets. Such intentions are only natural and obvious. It is therefore expected of the company to have a business strategy that supports such goals. But what is usually realised is different from the intended strategy. A closer look reveals that many companies often employ product-centric strategies that tend to be inward-looking.

Delivering products is a process that begins with a combination of market scan, customer research and technology. Each of these driving elements contributes to the initial product ideation and its development. Eventually, as Erich Joachimsthaler, CEO, Vivaldi Partners, remarked, "A good quality product is the foundation for a good brand."

But over time, and depending on the company, some aspects have a stronger and dominant impact on the product development and its road map. This is not necessarily due to customer or market forces; more commonly, it's an outcome of the corporate culture and business perspectives that dominate the company.

Certain functions take centre-stage in directing the company's overall product-centric strategy. Technology, as we also heard at the summit, is one such ubiquitous factor today. For example, in one software firm, a business manager noted, "Marketing has a relatively limited role; technology is what has driven this company. We're a technology-oriented firm." In contrast, in an FMCG company, a brand manager said, "Research and development has absolutely no sense of the consumer. They're a group of educated technology geeks who can do amazing things, but they need market focus."

Some companies believe that they know what is best for the customer. They operate under the notion that they can create products based on that technology and have entire markets buy their products because they are `technologically superior.' But a technology-driven approach has its advantages. It enables a company to quickly bring products to market since it bases product design decisions on internal company expertise. But as many examples would testify, the nature of technology-driven brands appeal to early adopters and niche markets that seek the latest gizmos. Given the high-risk/high-reward scenario, such technology-driven brands have depended a lot on intuition.

There is another problem with being technology-driven brands - they have complex or unnecessary features, which is well summed up by the comment by Gerard Kleisterlee, CEO, Royal Philips Electronics, "Thirty per cent of all recently introduced home networking products sold today were returned because the consumer could not get them to work; and 48 per cent of potential digital camera owners were delaying their purchase because they perceived the products to be too complicated." The conclusion is simple. The tech-driven brands are focused on providing better technology — not on closely matching customer needs and abilities with that technology. And those brands which do get the consumer connect well are rightfully among the top - Apple iPod, Google, e-bay - as Prof. Venkat Ramaswamy of University of Michigan Business School, pointed out in his talk.

Overall, the business objective hasn't changed. And the brand's role also continues to be the same - to win and sustain customer loyalty. Due to current market dynamics, a majority of product and sales-driven companies struggle in the long run because there is nothing much to differentiate them from competition — other than price, which becomes a sure-shot downward spiral.

To gain the status of being market-driven, a brand now has to engage its customers and listen to their needs. But there is a subtle yet profound shift in the customer engagement process. Customers no longer want to be controlled and told in a monologue-directed communication about brands.

The consumers will interact with the brand at a place and time of their choice. The brand custodians therefore need to figure how the brand fits into their consumer's life and not the other way round.

Again, to take a leaf from Erich Joachimsthaler's comment, mapping our brands' intersection points in consumers' lives is an important task for marketers today. That's not enough as one can no longer treat brand-customer relationship as a transactional kind of a relationship.

And building a relationship brings with it another vital ingredient for a brand - trust.

As shown by Prof. Ramaswamy in his presentation, in today's highly networked world with incredible number of communication touch points, brands are very vulnerable and can lose customers' trust very quickly with just one bad step.

Becoming customer-driven demands a painful shift in corporate culture and business practices. Easier said than practised consistently. For those who adopted the approach, success has been lasting.

In the hi-tech world (Microsoft, for instance) and consumer goods industry (as in Procter & Gamble), a leadership position can be established and maintained by being a customer-driven organisation that has superior skills in understanding, attracting and keeping valuable customers with products that deliver real value. This is not just a cliché, but the real formula for success.

What ultimately prevails is the understanding

that brand value is always determined by the customer — not by the company expertise or its technology.

And as the last general elections in our country showed, even the most well conceived and superbly executed advertising campaign can attract attention but it will fail to deliver when and where it matters if it doesn't truly connect with consumers who are relevant to the brand.

Advertising does help a great deal in polishing and adding sheen to the brand. Brand shining is good news, but for whom?

(The author is Director, Mindspark Consulting, Chennai.)

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