‘Most companies are going digital without knowing why’

Vinay Kamath Chennai | Updated on January 24, 2020

A Parasuraman

A Parasuraman, who recently retired as Professor and James W. McLamore Chair in Marketing at the University of Miami, has been appointed the Pro-Chancellor of Academics at VijayBhoomi University, a liberal arts university promoted by the IFIM group of institutions. Parasuraman has a Bachelor’s degree in Mechanical Engineering from IIT Madras, an MBA from IIM-A and a Doctorate in Business Administration from Indiana University.

Recently, he helped launch the Index of Service Excellence in India, an index to assess the service quality standards, and is associated with the IFIM-AIM Parasuraman Center of Service Excellence in Bengaluru. In this interview, Parasuraman talks on the digital economy, and whether the 4Ps of marketing still hold relevance. Excerpts:

What is the new debate in the marketing world, with the old paradigm being redefined and the online one having its own set of principles? Is the marketing discipline being re-imagined at B-schools?

Well, marketing is not getting redefined, but the mode of marketing delivery is, and only very few schools are keeping pace. Industry is way ahead of what we are teaching our students. The curriculum at B-schools doesn’t change that often.

Are the 4Ps of marketing still relevant?

The 4Ps framework is still relevant, but if you take pricing, for example, it is becoming more dynamic now. It is not like you set the price and forget about it. If you go online and see a price, an hour later, if you go back it is different. Why? There are some internal algorithms determining what the supply and demand are.

Of course, companies are thinking from a revenue maximisation standpoint; extract the best price you can get. But the problem is that it can erode trust. So, the communication with consumers has to change.

How you structure the 4Ps and make them a part of your marketing package requires rethinking. Most companies are jumping on the digital bandwagon without understanding what it is really doing for them and what the consequences are.

What happens to consumers who are not digitally savvy?

Through my research, I have developed a scale called technology readiness to measure consumers’ inherent propensity to react favourably to any technology-based gadget, be it a sophisticated product or technology-delivered service. This has four major dimensions. The first dimension, optimism, has to do with the general feeling that a particular technology is good as it makes life easier and gives us more control, more flexibility.

Another positive dimension is innovativeness. Some people are willing, even excited, to try new things. Others are reluctant. On the negative side, we have technology discomfort, or overall fear of technology, where people think technology is taking over their lives, and they’re no longer in control.

The fourth dimension is insecurity. Online banking is a good example. Some people are just mortified about doing anything online because they don’t trust the technology. So technology readiness index is an amalgam of a person’s position on these four attributes, and has implications for marketing. Many start-ups these days are technology-based. They get excited about a new, neat app but what about the user? So this index could be a potentially useful tool for companies, especially tech start-ups, to understand the market from the consumer readiness viewpoint.

In your study of corporates what would you say is top of mind for the CMO? Is it technology or the consumer’s digital experience?

Technology. I think there is a lot of pressure for companies to stay on the technology bandwagon. A professor at Duke University conducts a CMO survey every six months ( It tracks the assessments of a random sample of 2,000 CMOs across the US from major companies, many of them global.

The survey checks what is top of mind for CMOs. Questions like: is your marketing budget likely to go up or down? And about mobile and digital marketing. One of the trends shows rising investments in mobile and digital marketing; and the survey asks how confident the CMO is about getting a good return on investments. That has been kind of flat over the years. But to the question, how likely are you to increase the budget for digital marketing, most answer: Very likely! Without really knowing what it’s doing for them!

So I think there is a lot more work to be done in terms of understanding how to be more intelligent about digital.

Published on January 24, 2020

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