The Hindu Business Line : Vive la difference

ONE SIZE DOES NOT FIT ALL: Tailor marketing strategy to suit the region. The eastern part of India was once very low-priority on the marketing manager's list. (Above) A tram trundles along Kolkata's roads.

Visiting the great city of Kolkata recently took me back to my travelling days as a sales manager. It was also a revision lesson in the basic challenge of Indian marketing: how to deal with the needs of scale economies and the pressures of centralised and standard policies on the one hand and the great variety and variability of consumer habits on the other. I shall look at this issue starting with the ready example of the Eastern region of India.

Time was when marketing companies did not give the Eastern States anything like the same weight as the other three regions. New products were extended to that region last. Kolkata held the lion's share in consumer potential, but sales expectations generally were low and achievements mirrored them. With roughly a quarter of the country's population in each of the four regions, it was most often the case that the lowest share of all Indian business, sometimes as low as 10 per cent, came from the East. Review meetings would take up discussion of this area last — much to the amusement of everyone except the Branch Manager there! "Oh, those guys are peculiar," was the unvoiced feeling; and yet some brands had dominant shares and a disproportionate contribution to national sales — such as Pepsodent toothpaste, Margo soap, Pond's talcum powder and creams, besides Horlicks and a host of typically Bengali brands of herbal cosmetics, to quote a few examples.

On this visit to Kolkata I met a motorcycle dealer who provided me with a more hopeful view. Originally from the Western region, but brought up in Kolkata and fluent in many languages, he was sensitive and alert, and took great pleasure in showing off his new version of the city.

The rising optimism in his voice was infectious. After decades of neglect, the economy was certainly seeing a resurgence and the city was beginning to seem more welcoming to the outsider. It was certainly cleaner and impressed one with the possibility of a business revival. The new businesses, especially the retail and branded segment along with real estate and IT-enabled services, were clearly leading the upswing. The sales growth, for example, in the better class of motorcycles has been phenomenal, suggesting that there is a style conscious and affluent segment of the market here.

One of the unique features of the metropolis is that the native does not soil his hands with business, but leaves it to the immigrant from other States. One can hear any number of stories of people coming in from Rajasthan and Gujarat back in the 1950s or thereabouts with a few rupees and growing to dizzy heights of business success through shrewd investment, hard work and, of course, a good slice of luck. The Mittals are an example.

Unusually for the region, again, and contrary to what you might have supposed, the ratio of cars to two-wheelers is unusually high and models such as the Apache and Pulsar have become iconic. On the other hand, the age-old trams continue to clatter and shuffle their way through the heart of the city and yellow Ambassador taxis (looking a bit spruced up) continued their game of chicken-driving towards the approaching tram.

An important learning from years of studying the Indian market has been that one must find ways to vary selling and distribution strategies for different regions according to local needs, even if brand positions are necessarily uniform. Once, as a trainee manager, I had the temerity to suggest this to the management of a large international company. I was promptly rapped on the knuckles, "I am afraid that all our brand plans are made centrally and brands promoted nationally. By the very nature of our business it is more likely that we shall be moving not in the direction that you suggested, but rather the opposite one," said the head of all-India sales though I, of course, remained unconvinced.

Are regions so different then? Yes, but note that any generalisation about a market as vast as ours can have exceptions.

For instance, take channel strategy. A typical area of concern is whether to have exclusive stockists, dealers or showrooms, or allow them to handle competing brands. Obviously every sales manager would like the undivided attention of the trade for his own brands, but this is not always possible. Volumes vary and so do margins and costs. Hence, a businessperson who is happy to handle the brand leader as an exclusive would not care to extend the same treatment to a third or fourth ranking company. Here, the multi-brand outlet becomes critical in getting wider distribution because, after all, everything starts with sales turnover and volumes are directly dependent on availability and access to the consumer. This makes it imperative to have some flexibility. There is nothing sacrosanct in the uniformity principle per se. Logical though it has always seemed to me, I must grant that it is not so easy to practise the oft-quoted policy of variety within uniformity — the balance between administrative convenience and market responsiveness is easy to articulate, but a difficult and dynamic one to implement.

Finance is another key distinguishing feature. In some parts of the country, money flows more freely, the consumers tend to spend more and save less and in others it is the opposite. Similarly, the typical wholesaler in, say, Delhi, trades on a thin margin and expects higher levels of credit, hoping to make up on the rotation of stock — more than his counterpart in say Gujarat or Rajasthan does.

In Kolkata, or indeed in the East, as a whole, prices of daily essentials are generally lower; and people make do with less, and there is a huge market for higher value-for-money brands. In some areas, the company stockist or distributor is a great salesman, but is always short of money to pay back his dues to the manufacturer promptly. Left to himself he would far rather be a consignment agent and pay after having disposed of his stocks without any investment in inventory.

A third feature is the importance attached to human relationships. While the typical dealer exhibits the same sort of character all over the country, in this respect he is (`she' applies here very rarely, though now more than before) a hard-working, calculating, shrewd but open hearted person, willing to invite you, the representative of the company, to his home and lavish hospitality on you. The vania community is notable for social conservatism, especially as regards the family and women. They are also outwardly religious and no shop or workshop is complete without its pictures of gods and goddesses on the walls smeared with vermilion and sandal. The traditions are maintained with rigour in an extended joint family atmosphere, even if there are separate kitchens for branches of the family. The `old man' or founder is obviously shown all signs of respect if not veneration and the rule is that no differences are to be shown in front of an outsider.

Despite all these, the exceptions are increasing in some parts of the country rather than others — the way of life influenced by the cultures of Mumbai and New Delhi is steadily drifting away from the familiar stereotype described here. This has serious implications for the thinking manager. He must know when to turn on the personal charm and spend more time in pleasantries and mutual admiration before coming to the business at hand. He must value relationships and saving face above all — and the significance of this varies little across States.

Relationships with dealers are also a function of the social class of the dealer, which changes with the nature of the merchandise and technology. For instance, younger, college-educated entrepreneurs and those in the hi-tech product categories have a distinctly urbane, tech-savvy, modern air about them. Their models are much the same as those of the young manager and come from the TV business channels, MBA courses and American business biographies. For them, it is essential not only to act professional, but also to look the part. They are proud of running owner-managed business, and the managerial systems are as good as any. They have made the transition from being simply downtown stores, with little fuss but quite functional, to more noteworthy retail establishments.

As time goes by, brand preferences will be established long before the customer comes to the retailer. This changes the very role of the dealer outlet in the selling process. The market will mainly look for immediate delivery, exactly the colour and model they want and flexible finance help most of all. Then, such outlets would become more like food and grocery supermarkets that manage to yield the best return for space and time invested. Thus, each major market should be treated differently to the extent feasible and managers must include in their thinking the continental complexity while developing promotional ideas and in market development. Ignoring the colourful spectrum of markets could make your marketing unremarkably grey!

(S. Ramachander is the former director of the Institute for Financial Management and Research, Chennai, and a management consultant.)