The largest 100 multinational corporations rule the markets across the world and dominate the profit pool on offer. When an MNC’s business model interacts with a market, both are bound to be impacted and undergo a change, especially when the global corporation rides into a market as large as India.
Those who internalize the lessons learned, right from the market entry till the dominance, do their brand building with sensitivity and flourish.
I feel doubly qualified to venture into opining. Firstly, in my career spanning two decades, I have worked in four of the world’s leading MNCs, each a market leader in its industry in India– Hindustan Unilever, Diageo, Visa and Star. Secondly, in this duration, I crossed boundaries of demographic segments, value equations and modalities – B2C, B2B, B2B2C. I also deep dived into habit change, innovation offerings, fledgling, growing consumption levels, tangible and intangible value, rural, urban and rurban for product as well as services businesses.
A few contextual points for what we have seen in India ever since 1991
• India is not merely a country of consumers. It is a crucible of new emerging consumptions – the biggest and the most diverse in the world.
• It is also the youngest and the most populous country on the planet. A mass of humanity –moving, at each level, from nothing to something.
• India’s per capita income and consumption needs to be framed and seen in terms of the Purchasing Power Parity. That provides an accurate assessment of its size and position. We get deluded by the theme of ‘emerging middle class’. In India, the ‘emerging’ is already here and the middle is almost the whole of what we have. The fastest growing cohort is sub-middle and urban mass.
• Consumption growth is fueling economic growth. It is a constant flow onwards– glacial in parts, rapid elsewhere. It is a surge in expectations where private branded alternatives have provided for gaps from public institutions and services.
• Localization pays dividends. Scale wins. The three most successful MNCs in tenure, scale and growth have been HUL, Maruti Suzuki and ITC. All three don’t think of themselves as alien. Their takeoff happened because of local products driven by local innovations and local market understanding. They brought global brands to India and made them known, trusted and preferred.
• Indian consumers have moved from a cautious, frugal, limited scope of existence to an expressive, extroverted, indulgent and consumption minded lifestyle. This is stimulated by rising income, high growth (even at worst times, India has been among the top three economy ever since 1991) and free market dynamics.
• As a market of inherent contradictions, we are transforming into a skewed quadrilateral of consuming classes instead of a very broad base pyramid. Therefore, mass businesses can dig into and stay for long. Even 1% of India’s available population is a staggering number. As yet, it gives very small numbers per capita but India’s magic lies in Nth projections when aggregated.
With this context, we look towards prescriptive growth marketing commandments that present themselves as worthy of adoption
• Watch the Youth – this is the ‘go to’ demographic segment. Youth culture in India is ‘norming and forming’. Any business or brand that establishes cultural authority in this segment is mining gold.
• Creating a mammoth scale advantage or a massive unrelenting brand advantage is the basis for corporate growth.
• Phone and internet access are central to organization of consumer markets. There are new segments rising in the consumption scale and giving access where it did not exist earlier.
• India is not one market but many. Therefore one has to evolve offerings to cater to the many. Your current highway may become a small alley of dark insignificance whilst a village pathway may open into a super expressway to riches. Watch the road and keep driving.
I shall be true to my functional salt and emphasize that the brand is the one magical differentiator. The brand is the one guarantee of affiliative accretion. It needs a functional business- compact at the management level- to flexibly deploy brands in a portfolio.
In most MNCs, the country managers get to play a central role as resource allocators, orchestrators and they are front facing national governments and consumers. When they are sensitive to marketing, they make better strategic and operational decisions. Marketing must be in the corporate mainstream in our times where functional information, knowledge and expertise are intimately linked to technical, manufacturing, human resources and financial interlinkages.
There is no place for barbed wired organizational structures that compartmentalize, isolate and section out leadership by function. Instead, the need is for functional leaders to be kingpins connecting other throughout the organization.
Brand management is the one lever that helps on all strategic fronts: Scale efficiency, returns, local fitment and cross market capability.
Therefore the brand is the biggest booster to moving a business, its strongest rampart for defense and its biggest insurance against an uncertain future.
Happy Branding.