Category: General Marketing

Industry 4-0 originated in Germany. It has touched all businesses — big and small and has become a global phenomenon. There is connectedness of business and customers and it is increasing. The capabilities of analytics and business intelligence are advancing. There is machine human interface and a potential for inter-operability. Digital technologies reduce costs and enhance revenues. The safety for workers has increased. There are reduced risks and human errors. All this creates a strong case for integration with digital ecosystem.

Industry 4.0 will increase the contribution of industry to GDP from the current 15% to 25%. Industry 4.0 will impact SMEs too, as 40 per cent workforce is accounted for by it.

The successful transition to industry 4.0 depends upon adoptation to digital technologies and culture and adoption of design thinking. Instead of workshop in silos, we have to learn to collaborate. The collaboration extends to various functions within the organisation and across the organisational boundaries.

Design Thinking has one purpose — to make the market simplified, by going to the first order of innovation. Design Thinking always moves from the first-order and proceeds to second and third order. It is to be seen how to make the human mind  to go to the first-order. You have to prepare the design mind. Generally, in product design, we start designing from the current state, which could be third state, or fourth or fifth. The efficiency that could come when it starts from the first-order will not be visible.

There are four stages of Design Thinking. The first stage is  to  understanding better. You can do so by observing patterns, connecting the dots and unearthing the blind spots. The second stage is to apply the Desirability. The third stage is to assess technological Feasibility. The fourth stage is to see the Viability. This is going back to Standford Model of Ideo. After examining  whether the product has desirability, feasibility and viability, it is to be seen at what price point it can be given and at what performance level. Here onwards, the business design space begins. It is to be seen what is the mystery in the market place. This mystery is to be convereted  into heuristics. That is to be converted into algorithm. Mystry, Heuristics and Algorithm are the three vertical pillars of design.

The design has five elements:

• Right Skills
• Right expertise
• Right perspectives
• Right ideas
• You align them together.

There is an emotional layer on the design along with the skill layer. The emotional layer has five frictional forces — doubt, conflict, anger, fear and ego.

Design Thinking cannot be a dated concept anytime. It does not have a shelf-life. It is a way of life.

Design Thinking has three dimensions, one — the desirability or the end-user dimension, the feasibility or the engineering technology dimension, the viability which is the economic or value dimension.

Business has to go beyond economic transactions and must serve a large purpose in society. Lever Brothers founder Lever in 1890s wrote about Sunlight soap that it has to spread cleanliness, reduce the work for women, foster health and make life more enjoyable. Brands must have purpose, and must be authentic. It is as much true today as it was 100 years back when Sunlight was introduced. This is called Cause Related Marketing ( CRM ). A CRM campaign should not be one-off, but must sustain. It should be for a relevant cause. The cause or purpose of the brand must influence everything a brand does. Lifebuoy encourages children protection through the simple act of washing hands  with a soap. Rin emphasises chamakti safedi that gives confidence to shine in social situations. That has led to the establishment of a Career Ready Academy to develop English speaking skills, office dressing skills and interview training. Marketing then becomes purpose driven. It goes beyond brand communication, and is at the heart of product innovation and business models.

Organisation had just Chief Marketing Officers ( CMOs). As the engagement with digital media is more, marketing technology has acquired significance for the brands. It has led to the creation of the position of  Chief Marketing Technology Officer (CMTO). Consumers are technology-empowered. They should have access to the companies and there activities. Millennials search and seek information on the net before buying. Experience is shared. In yester years, this feedback was limited to one or two people. The focus is on technology and digital operations. Yes, we still do require creatives, but the focus is no longer on it. A CMTO not only establishes a companies digital presence and gets data from consumer conversations, he goes beyond and provides experience to consumer across several touch points. He has expertise in both marketing and technology. Formerly, companies asked Chief Marketing Officer and Chief Information Officer to work as a team to achieve the goals but they have not remained relevant. CMTOs have taken over.

CIOs were concerned with operations. They managed ERP system. CMTO works to transform the customer experience through technology. He manages CRM system, digital advertising that is targeted. A bank with a CMTO will send a Tweet to its customers in keeping with his needs. He is in fact a relationship manager too. A CMTO of a hotel group can provide a virtual tour of its property. It is all contextual. Gone are days of unilateral communications.

A marketing officer of future will spend more on IT than a CIO.

Diamonds are just rocks mined from the bowels of the earth. They have been invested with value by good marketing — showing diamonds in use by the celebrities and royalty, promoting them as an expression of love, and as something that stood the test of time. This is true for Swiss watches and French wines. These products have become what they are today riding the back of successful marketing.

These products symbolize what a luxury brand is. They satisfy the need for self-worth and an aspiration to belong to an exclusive club. They demonstrate sophistication and class. The ownership and gifting of such products have high emotional values. Consumption of such products itself becomes a source of identity. A luxury product is a market of differentiation, e.g. LVMH bag or Cartier watch.

Price premium on luxury brands leads to huge profit margins for most luxury brand companies. A luxury brand’s value lies beyond its core product function. More than 80% of it consists of brand value and the rest is made up with features such as quality, technicality and aesthetics. A luxury product becomes justifiably expensive and is meant for a select few. Luxury is a matter of perception. It is aspirational. A brand has to meet this perception by premium quality. Luxury marketers have to shape the consumer perceptions. Even amongst the select audience of luxury brands, a smaller super niche super elite club can be created. Such elitist bias is shown by creating signature products and by-invitation sale. As many more people can afford luxury brands now, prestige, and exclusivity are created by distance, not necessarily financial, but intellectual and cultural. Ad agencies promote cultural and intellectual distances.

Corporate elite is a good audience for luxury brands. Luxury itself is vulnerable to dynamics of the market place — what is luxury to one is a matter of life-style for another. Luxury brands cannot afford to become common place, and hence have to innovate constantly.

Salman Sal Khan set up an education website in 2011 — khanacademy.org. He has been listed by Fortune among the hottest business stars under 40. He is called Maths Moses. He initiated the revolutionary College 2.0 concept. Khan Academy is not-for-profit online educational venture. It received 80 million page views. The free videos, on an average, are seen by 20,000 people, and range from subjects from function to polynomials. His wife Umaima Marvi is a physician. Shantanu Sinha is the President and COO of Khan Academy. The trio is highly qualified. Sal has three MIT degrees followed by an MBA from Harvard. Shantanu has four degrees from MIT. Umaima has a biology degree from MIT and a medicine degree and post-doc degree. Before setting up Khan Academy, Sal was a hedge fund analyst. Khan uploaded his videos on YouTube. His mother is from Kolkata and father from Bangaladesh.

VW had a desire to overtake Toyota in the American market. VX had just 2 per cent of the US car sales, a fraction of what Nissan and Toyota have. It is less than that of American car companies Ford or GM. Toyota’s hybrid car Toyota Prius met the emission norms. Diesel as a fuel was associated with smoke-belching buses and roaring 18-wheelers, and this perception of it being a dirty fuel was difficult to remove. Diesel could give more mileage per gallon and it was for the car companies to establish it as a clean fuel. Heavy vehicles carry a tank of urea-based solution which reacts with nitrogen oxides ( NOx ) emission of diesel, and bind them. This reduces pollution, but the extra tank increases the weight, and reduces the performance. VW claimed that even without this extra tank, their diesel was a clean fuel; with fuel efficiency of hybrids. The strategy made VW to go past Toyota in terms of sales. Here was a car that was environment friendly without sacrificing performance.

However, West Virginia university researchers were perplexed by fuel emissions in the lab and on the road of the so-called clean cars. They observed these discrepancies in 2013, and the findings were reported in 2014. The brands were not mentioned. This prompted California regulators to conduct their own investigation. This led to the discovery of a software installed by VW to cheat on emission norms. It was installed on 11 million diesel cars worldwide. It was activated in lab conditions so that the car passes the test. Once the cars were out of the laboratory, it was deactivated, and the cars emitted fumes 40 times the permitted levels.

The event will affect the car makers, other countries and the future of diesel itself.

Business process outsourcing was a people-based model. It has now moved to an outcome-based model. It is called Business Process Management ( BPM ). Earlier they used to take the low-end commoditized work of international clients. There was a public perception that it was an industry of dead-end jobs. The focus of the BPM industry is now to help clients with decision making and become partners offering end-to-end seamless processes. That gives competitive edge to the clients. Call centre or contact centre are the terms which are still in currency, but contacting is just one part of the industry. The BPM industry employs quality, specialised resources. India is expected to be the ‘nerve-centre’ or hub the global BPM sourcing industry. BPM industry positions senior domain experts with every clients so that strategic discussions take place. It is a high cost model. BPM gives specialists a great career option.

Crowdsourcing is around us as a concept for the last 10 years. It is a combination of crowd and outsourcing which means getting a task done by engaging a crowd of people. It is a participative and democratic approach to get something done — be it a creative, a script, start up ideas or funding. Mostly crowd is the audience of online media. Apple crowdsourced photos taken with its phone by regular people around the world. P & G commercialized ideas sourced from individual creators. Coca Cola ran ‘ Share a Coke’ campaign with loved ones. Advertising  agencies can crowdsource creative ideas. Publishers can crowdsource books, stories, novels. Crowdsourcing output commands a lot of respect as it is non-partisan and non-agenda oriented. It gets quick acceptance. Crowdsourcing done by an advertising agency augments its creative efforts. When an organization excessively depends on crowdsourcing, some may think it is devoid of ideas. Besides, some ideas thus sourced can be jaded or copied. Crowdsourcing is economical. It saves costs. But that is not the objective. The objective is to engage the people. Sony crowdsourced some ideas for its popular CID serial by asking people to conclude an incomplete story. Balaji Motion Pictures proposes to use the platform to get scripts. Crowdsourcing can raise funds for films and can be used to source scripts.