Known for his candour and acumen, Nirmalya Kumar has served on several boards as director, including heading strategy at #Tata Sons as member of the Group Executive Council. He has also authored eight books and is currently the Lee Kong Chian professor of marketing at @sgsmu. In an interview with @outlookbusiness6124, Kumar talks about building ‘Brand India’, and the damage wreaked by corporate-governance scandals.
#NirmalyaKumar #BrandIndia #Business #OutlookBusiness #OutlookMagazine
#NirmalyaKumar #BrandIndia #Business #OutlookBusiness #OutlookMagazine
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00:03 So the perception of India as a brand in general
00:13 is a youthful, energetic, young brand,
00:15 a country that is on the move, a country that
00:17 is economically rising, both in political power,
00:19 economic power, as well as also soft power, as we call it.
00:23 That's the overall perception.
00:25 Within that overall perception, there are some problem areas.
00:27 One of the problem areas is a recent slowdown in growth.
00:30 The other problem areas, especially
00:32 in certain parts of the world, is very much
00:34 related to around the communal differences that
00:36 are there in India, which have not been resolved.
00:38 And finally, the last negative perception of India
00:41 would be around women and their role in India
00:43 and their position in India.
00:44 So in general, it's a positive story
00:47 on the economic, dynamic, youth front.
00:50 Especially for business, people think of it
00:52 as a must-win kind of country.
00:53 But there are, in recent times, two or three small problems
00:56 which have to be resolved.
00:57 So it's hard to say what is a good brand.
01:04 What people are looking for in a brand
01:06 is generally either a functional need that is fulfilled
01:09 or a symbolic need that is fulfilled.
01:12 We call that in branding the logic and the magic of a brand.
01:15 So every brand has to think, why do we exist?
01:17 And in that existence, there's a functional part.
01:19 This is what I do for the customer.
01:21 And then there's a secondary part,
01:22 which is related to the personality of the brand, which
01:25 has to do with how the customer sees themselves reflected
01:27 when they consume the brand.
01:29 So in Adidas, yes, OK, it is about the shoe
01:31 and the performance of the shoe, of course.
01:33 But it's also about, what does Adidas say about me as a person?
01:35 The top companies in the world, the great branding companies
01:46 in the world, they know that we live our brand
01:48 through our products and our people.
01:51 Now, the companies that are not that sophisticated
01:53 may not have realized that, but increasingly, people
01:56 is becoming an important part of brands,
01:57 especially in those brands where people touch the consumer.
02:01 See, there are two kinds of brands,
02:02 those like Procter & Gamble, where the people don't
02:04 touch the consumer.
02:05 It's the product that touches the consumer.
02:07 So the brand has to be communicated
02:08 through product and advertising.
02:10 In the other case, where if you're
02:11 a company like a Starbucks, where the people are serving
02:14 you the coffee, so yeah, the product is part of the brand.
02:17 But there's also a very big people component of the brand,
02:19 because the person serving you the coffee
02:21 doesn't behave in a customer-oriented manner,
02:25 doesn't customize your coffee.
02:27 Then, of course, you don't get the right product,
02:29 and you don't get the right experience.
02:30 So increasingly, people understand that branding
02:33 is about product plus people.
02:35 If you're in a service business, if you're
02:37 in a business where your people touch the end user,
02:39 then, of course, people become more important, perhaps,
02:42 than even the product.
02:49 So basically, in general, whether boards in India
02:54 or boards overseas, in very few companies
02:57 does marketing come as an item on the table.
03:00 So generally, board of directors meetings
03:02 are structured around, number one, the finance, number two,
03:07 the strategy going ahead, and number three,
03:11 and to a lesser extent, is are we
03:13 following the values that we are supposed to espouse?
03:16 So generally, if you look at a company,
03:19 they'll have big companies.
03:20 They'll have 1,500 brands.
03:22 So those branding issues rarely surface
03:24 to the board of directors unless there's a crisis.
03:28 So in general, you would find that, especially if the--
03:31 I don't know, I've been on 20 boards, perhaps--
03:33 branding issues rarely come to the table
03:36 unless there is a crisis.
03:37 The most important thing is are you relevant to the customer?
03:48 So relevance is very important.
03:49 You have to be relevant to the customer
03:51 and their current state of consumption
03:54 and their current state of mind.
03:55 That's the first thing.
03:56 Secondly, being relevant is not enough,
03:58 because being relevant means there
04:00 may be seven other brands that are relevant, too.
04:02 So how are you different?
04:04 And how are you different has to do with this
04:06 is what the competition offers.
04:07 This is what we offer, which is different from what
04:10 the competition offers.
04:11 And the last part of it is being credible.
04:13 Being credible has to be, if I promise you something,
04:15 can I deliver it?
04:17 If I promise you, I must be able to deliver it.
04:19 If I don't deliver it, then the customer is disappointed
04:22 and you've destroyed your brand, no matter
04:23 how much advertising you've done.
04:25 So we say you have to be relevant,
04:27 differentiated, and credible.
04:28 So the brand exists at several levels.
04:40 There's a level of corporate reputation,
04:41 which is with the broader community.
04:43 There's a level at the employer brand,
04:45 which is with the prospective and current employees.
04:47 And then there's a level of the consumer brands.
04:49 So if you're a company, you have a corporate brand,
04:52 you have an employer brand.
04:53 But in terms of consumer brands, you may have many brands,
04:55 not just one, one of which may be also the corporate brand.
04:58 So when a corporate governance scandal or any scandal
05:02 hits a company, it affects the corporate reputation
05:04 dramatically, the employer brand somewhat,
05:08 and the consumer brand, depending on how it's managed,
05:10 can be a minimal effect.
05:12 So there are two kinds of startups.
05:15 There are the traditional product company startups,
05:17 and then there are what we call platform company startups.
05:20 Platform companies are companies like Uber, Amazon,
05:23 telecom companies.
05:24 Basically, what they're doing is they're building a platform.
05:26 So in the beginning, to get people onto the platform
05:30 and to make it the default platform in the industry,
05:33 they have to do a lot of discounting, let's call it,
05:36 in order to get people on the platform,
05:37 because they have to be able to get people
05:39 on the platform, and they have to be able to get people
05:41 on the platform, because they're fighting
05:43 to get the most number of people on the platform.
05:45 Once they become the platform, like an Amazon or an eBay
05:50 or a Google or a Facebook, then they monetize later.
05:55 You see, so that's a different model
05:56 from the traditional business model we followed,
05:59 where you have to start making money almost from day one.
06:02 So these companies that are giving subsidies
06:03 have to also realize one thing.
06:05 There are different kinds of platforms.
06:06 There are platforms which are sticky,
06:08 and there are platforms that are not sticky.
06:10 Facebook is a sticky platform.
06:11 Why?
06:12 Because if you want to change from Facebook
06:15 to some other social site, you have to not only change,
06:18 all your friends have to move with you, right?
06:20 On the other hand, Uber is not a sticky platform.
06:23 Why?
06:24 You want to change from Uber to Ola,
06:25 all it requires is one app.
06:27 You see, so in Uber, giving discounts
06:30 is not a smart strategy, whereas in Facebook,
06:33 getting people on for free is a smart strategy.
06:35 So we say there are two kinds of platforms,
06:37 those platforms where customers and suppliers
06:39 can switch easily, and those platforms
06:41 where switching is very hard and they are winner-take-all.
06:44 So Facebook is an example of a winner-take-all platform.
06:47 Uber is an example where both the driver
06:49 and the customer can switch with one app.
06:51 In fact, most drivers keep both apps,
06:53 and most customers have both apps on their phone.
06:55 So those platforms will find it very hard
06:57 to become profitable, and giving deep discounts initially
07:00 is not going to lead to any pot of gold at the end.
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