Knowing your customers

I appreciate that it is important to know customers. But how important is it really? Also, what methods would you recommend for me to use on my own?

_ Sumana Nayak, Bangalore

Sumana, the customer is a very important entity. All business exists and revolves around this entity. Its very purpose is the fulfilment of the needs, wants, desires and aspirations of this entity. To that extent, the customer is the central focus of all business activity. The customer is the pivot around which all else revolves.

The customer, therefore, needs to be understood. Not only at skin-deep level, but at levels that are deeper and subliminal, even. Most businesses understand customers as numbers that contribute volumes and value to the enterprise they run. Most companies, however, do not believe it is important to drill beneath the skin of it all. If you understand your customers well, you will be able to predict behaviour, predict change and gear up your business to face it all when it happens. Most businesses, however, don't do this, and get surprised when their customers articulate new needs and gravitate towards new brands, new processes and new vendors. All of a sudden. Understanding customers in depth is a business insulation process at the macro-level and a business enhancement process at the micro-level.

There are methods that are soft and hard. The soft methods revolve around observational studies on your customer. What does he do? Where does he shop? How does he do this? What is he looking for? How satisfied is he with what he has? And more.

Add to this the quantitative techniques of data mining. Understand the numbers in depth and drill them to milk out insight. Watch how the numbers pan out seasonally. See a trend and paint a pattern.

A more holistic method is the scenario planning method of understanding the customer. Here, you paint several scenarios of future possibility and you traverse down each to build business plans relevant, original and innovative to cater to each possible route.

Is the consumer durables market a good market to thrive in?

_ Shalee Joseph, Hyderabad

Shalee, consumer durable brands are penetrating markets wide and deep. India pulsates in its small towns. Durable companies have understood this, and the biggest successes in the realm of kitchen appliances and durables of every kind, microwave ovens included, are from the small towns of India. The action has shifted.

New markets mean new ways of reaching out. The language in use is that much more real, and less devoid of hype which sells in urban India. Functionality is driving the market, and the cosmetics of the products on offer is sealing loyalty indices. Brands are attracting good premiums with the functionality lead. It is important to appreciate that the market is 70 per cent functionality-led and 30 per cent cosmetics-led.

This is a market that is slated to boom.

Tea marketing seems to be on the backfoot in India. Why?

_ Mohana Sundaram, Chennai

Mohana, tea is the dominant drink of India. The per capita consumption of tea is well nigh 14 times higher than that of coffee in the country. Therefore, in terms of volume, the beverage outsells and is out-consumed than coffee in India.

However, in terms of imagery, tea is today the fuddy-duddy drink and coffee is the “with-it” drink. All this has happened over the last decade. In many ways coffee has turned the tables on tea and has occupied a dominant position of being a classy, with-it, ‘hep’ and contemporary beverage. While tea is common, coffee is uncommon and, therefore, classy. The café revolution that began in this country with the opening up of the first cafe in India by Cafe Coffee Day in November 1996 started it all.

Tea’s brand positioning needs a serious overhaul. The tea sector at large needs brand thinking at the generic level for a start. The beverage needs a wake-up call, for sure.

What should be the prime goal of a detergent marketer such as Hindustan Unilever Ltd (HUL) in India?

_ Rohith Sarma, Chandigarh

Rohith, I am glad you said “prime goal” in your question. There are many really. Detergents is the category that cries for innovation the most. It is important for a company such as HUL to focus on getting water-positive in a country that uses just too much water to wash its clothes. The more HUL focuses on less-water-per-use-of-washing, the better it will do in the country. Water is the biggest challenge of the years ahead. HUL needs to prepare for this era.

HUL needs to remember and remind itself time and again that it is not just selling detergents, it is selling a wash solution in a country that will have less and less water at its disposal.

What is really a luxury brand?

_ Gopinath Mahapatro, Delhi

Gopi, to be a luxury brand, it means being in the stratosphere of branding. It means being in a space where rationality ceases and irrationality begins. Luxury to that extent is a lifestyle. Equally, it is something to flaunt.

In India, for instance, you can buy curtain material at prices that range from Rs 200-700 per meter at the mass end. Equally, you can walk into an Atmosphere and buy luxury curtain fabric that costs Rs 4,000 per meter. Luxury has snob appeal and flaunt value that is irreplaceable by anything else.

(Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc).

>askharishbijoor@gmail.com

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