Prof Tim Calkins of Kellogg School speaks to BrandLine on the challenges Indian brands face abroad, and vice versa.
Tim Calkins helps people use marketing strategy and branding to build strong and profitable businesses. He is Clinical Professor of Marketing at Northwestern University’s Kellogg School of Management where he teaches marketing strategy, biomedical marketing and strategic marketing decisions in MBA programmes. He is also the co-academic director of Kellogg’s branding programme.
Calkins is the author of Defending Your Brand: How Smart Companies Use Defensive Strategy to Deal with Competitive Attacks and Breakthrough Marketing Plans.
An expert on Super Bowl advertising, he created the Kellogg Super Bowl Advertising Review in 2005.
In addition to teaching at Kellogg, Calkins works with major corporations around the world on strategy and branding.
Recently in Kolkata to attend a branding conclave held by the Confederation of Indian Industry (CII), Calkins spoke to BrandLine about Indian brands, the importance of marketing, defensive strategies and the relevant medium for marketing.
Marketing is often interchangeable with sales. Your comments?
Marketing and sales are fundamentally different but they go hand-in-hand. Marketing is all about value proposition and creating it. It goes way beyond the sales process.
I think, in an era of competition, companies which understand and value marketing will survive.
In the short run, you can be successful in manufacturing a product and having a good sales force. In the long run, though it’s a tough approach. You need to have a differentiated product and people should identify with the brand.
What is your take on Indian brands in the global scenario?
Indian brands are incredibly strong, despite the presence of global biggies, here in the country. But globally, Indian brands are just beginning to come into the reckoning.
So the big question now for these companies is how to build themselves globally. It also presents a great opportunity.
Any specific brand that you see making its mark in the global context?
India has so many big powerful brands. But globally there are some challenges.
Mahindra is beginning to get a good presence in the US. And Infosys is seeing good traction overseas. The key for these brands is that when they go to new markets, they’ll have to be clear on their positioning. The question they need to answer is how they are different and special. It’s a little different from how they are placed in India.
For example, here people know the brand and it works across categories. But there you need a tighter positioning.
So how important is brand positioning in the global context?
In most markets there are well established players. So it is difficult to break in. These established players defend their brand. A well executed defence plan can really block new players.
While there is an opportunity, the Indian brands need to differentiate themselves from others. In a competitive market, it is not enough to be just a good brand.
How important is local advertising?
Every advertisement has to be locally relevant. Indian brands do understand the culture and develop messages accordingly. The challenge would be when they go global. They have to understand the new markets and carve a message relevant to that culture.
This is also one of the reasons why global brands have stumbled here in India. They haven’t been able to figure out not just the logistics side, but also the message (advertisement) side that will help them connect with the people.
India is uniquely placed with mom-and-pop stores on one hand and organised retail (departmental store) on the other. How does it influence the market?
The fragmented retail system is an advantage for Indian brands. This has helped big and established players. Because, selection is limited at small stores, local brands have a good distribution system in place.
Another reason why global brands had trouble is the fragmented retail system. You need to have so many points of contact. This becomes a barrier. But the challenge is that you need to keep building your relationship with the small retailers.
From the local perspective, Frito Lay has been able to put in place a good distribution system to ensure delivery.
So will organised retail eat up small stores?
Today organised retail has had trouble getting a foothold here. Partly, logistics, and sometimes regulations, are an issue. Going forward, some of these large players will definitely be in the market. Even when they do, I don’t think it will be the end of small players. Transportation will remain a challenge.
Moreover, everyone will not be able to reach these larger stores. So you need local stores. So over the next decade, despite large-format retail finding a way, it is unlikely to change the market scenario in India.
Does India present a challenge to global players, especially marketing in rural areas?
India is a fairly fragmented market. And this makes it even more difficult for global players or new entrants to have a foothold.
This comes as an opportunity to Indian companies. And, they are not under short-term competitive pressure. Thus, Indian players can invest in new markets. But the challenge for companies come in the long run as they tend to become complacent.
Any such sector that you would like to look out for here in India?
The airline industry here is fascinating. Kingfisher is an interesting story. There was so much growth for them. But they could not stop competitive threats. In the end, they could not create enough value to sustain and make the model work.
Then there is Air India, a company that has struggled enormously. It will be interesting to see how they shape up. Even now there are a lot of competitors who are growing effectively. Competition should make them better.
If Air India is able to put together an effective strategy and respond, then in the long run it will be able to emerge stronger.
How important is pricing in a market in India?
The problem is, if you play the price game then it is difficult to generate profits and create value. It’s certainly happening in the pharmaceutical sector, where money is in differentiated products. People also tend to associate pricing with quality. At low price, they take it as a benchmark for quality. Similarly, it’s difficult to go upmarket when a brand is anchored in the mid-tier.
So what is your suggestion to Indian companies?
There is going to be more competition in years to come. If you are not careful, new entrants can do enormous damage. For Indian companies, marketing is not just about building businesses but also about defending the brand. One of the things that does not get attention is defensive strategy. Since competition will increase, you need to find a way to react and respond to it.
Today what is the most important medium for advertising – print, outdoor, TV or digital?
Marketers are still figuring out the right mix. While social and digital are important media, they do not change the fundamental concepts of marketing. The question remains – what are you trying to do or what you need to sell. Once this is answered, then the vehicle to be used also becomes clear.
On its own, it is very difficult to identify which of these media are important.