Slowdown will get worse next year: Pranesh Mishra

07 Sep,2011

Mr Pranesh Misra, Chairman and Managing Director, Brandscapes Worldwide, launched the global data analytics and insight consulting firm after a career spanning 30 years in marketing, marketing research and advertising.

With a team of domain experts who mine marketing data for insights, Brandscapes consults in the brand and marketing strategy spaces for consumer goods, retail and financial services sectors.

Strategy, says Mr Misra, has long been a fascination with him. Having started his career in research with a job in Lintas and then Clarion, he moved to advertising and started Pathfinder, the research division of Lintas. When I look back I realize that it was the part of my career where I was far more intellectually engaged and therefore it was much more enjoyable for me as a person, he says.Strategy was always a passion for me.

Read on for excerpts from an interview with Ritu Midha

 

Is the grass greener on this side of the fence?

The grass is always greener on the other side of the fence  depending on where you are. But this I can say it has been an exciting experience, because I am doing different things. I am learning new things for instance quantitative analysis, data at a level much higher than one was exposed to; we are also interacting with brands and clients globally.

Also, starting something from scratch to an entity in itself is a fascinating experience we are now 85 people strong, and have about 25 regular clients. Considering that we started at the same time as the recession began, the fact that we are standing today is a good thing.

Broadly, what are the work areas of Brandscapes?

Brandscapes works in broad strategic areas. A large area of interest for us is Research Analytics we look at research data that clients already have, and get more value out of it, through further analysis and cross-fertilization. We also do Marketing Science Application, which is to predict the future based on past data, and Future Forecasting through sophisticated modelling.

Marketing Dashboards is another service we are proud of. We realized that marketing data is all over the place and it is very difficult for anyone to take a holistic view. There was an opportunity to take sales data, market share data, and brand image data and put it all together on one screen It provides a holistic view, and has given us good traction.

We also have a brand strategy service known as Strategy Maps.

Have organizations become more conscious about research?

If I look back over the last ten years, I can say there is a lot more orientation towards listening to the consumer. Has it has reached the global level? Obviously not. There is not enough awareness about qualitative research. For example, uninitiated marketers today ask, So how many people said this? In qualitative research you can’t answer that kind of question it is about what went behind.

Having said that, the focus is increasing on listening in on the consumer rather than deciding everything on gut feel. There is definitely expansion of research beyond the larger companies and multinationals.

I would also stress that research business, per se, needs to be far more accountable. I have noticed over the last few years that research business is far more engaged in downloading the data, than in helping the client take decisions based on the data. Which is why we started with data analytics.

Moving to a specific area of interest, what are the essentials of brand building beyond logo and packaging?

To my mind the brand should have seven to eight different dimensions that should be clear to everyone involved in creation of the brand. One, there should be clarity as to who is your competition. Very often you enquire with clients about their competition, and the answer is everybody in the category, or in some cases it is unclear. If I am selling a brand of soap, every soap is my competition. Now that cannot give you a very sharp strategy. Second, clarity on the target audience is very important very often it is not a decision that is very well thought through. It tends to vary from year to year. As a result, the brand architecture remains confused.

The core insight about the consumer that we leverage into a brand is usually the most difficult one to decide. Very often there is no effort to define it. If you look at Google, the search engine, they said that people don’t want clutter they want information in a clutter-free way. So they want for a strategy where they didn’t want a landing page so it is insight that drove the strategy. Very often it is the most difficult thing to know, but it is a must for the structuring of the brand.

Then there are elements that people tend to look at: Functional benefits, emotional benefits, and the brand personality. When the client comes up with the feature, the research agency has to check the benefit to the consumer from that feature. Often, that leap is not taken. You could say it is a germicidal soap but that is not enough, you need to look at functional and emotional benefit. For instance in Lifebuoy, the functional benefit is that your family could be free of germs. If your kid gets a cut, and you are using Lifebuoy, you can be free of concern. If you wash your hands with Lifebuoy before eating then you are germ-free. The emotional benefit was translated into Koi dar nahi (No fear). You feel in control because you don’t have the fear of germs coming in. This needs to be documented and discussed.

Then, of course, comes the DNA and the key differentiator of a brand. These are some of the elements that need to be structured to create a holistic brand.

Most brands do not succeed because they do not do proper brand planning.

As per a recent Forbes study, globally customer retention is far more important than acquiring new customers.

In India, if you look at segments like telecom the last seven-eight years has been about acquisition. If you talk to players about customer retention, you would not get as much attention because the whole game was about customer acquisition. That holds true of other growth sectors too. It is largely because of the country’s development stage and product lifecycle.

But globally, markets have matured and retention becomes more important. You need to retain the customer for a longer time to get maximum value out of the customer and there is very little to acquire anyway.

Coming to India, due to the exponential GDP growth in the last ten years, the focus will move to retention, so I see that becoming a need going forward.

Coming to the obvious question, is the slowdown a reality or is India not that impacted? And is it impacting branding exercises?

With GDP level at 7.7 percent, India is still seeing some growth. You cannot compare it with the USA and UK where they are either seeing negative growth or no growth. More than slowdown in growth, the biggest challenge is slowdown in sentiment. The optimism that we saw last year is now turning to a little less of optimism bordering on pessimism. And that typically affects the consumer spending pattern. Consumer sentiment has a long-term impact on growth. That is what we have to watch out for.

It is the reasons inside India itself, rather than global impact, that is generating despondency in people. When they become so concerned they become conservative in their spends they will postpone buying of high-ticket items like houses, cars, etc and that impacts demand.

Do you see the festive season bringing good news for marketers?

I think everyone is hoping for that to happen. But marketers would have to come up with really good offers and discounts to start again. This year there is a dampened demand in durables and cars sectors  it is already visible  and it is not going up. So there should be many more cut-throat promotion offers during the festive season this year, as compared to the previous year.

You are expecting the slowdown to continue to next year

Unless something very good happens in the economy, the negative sentiment will pull down the demand. As interest rates keep going up, investments will start suffering. Prices are rising. I am not really optimistic about next year

What about FMCGs, will they sail through?

I don’t think so if you are talking of mass FMCGS. They did not see a lot of slowdown in top line growth in 2008. I think they are suffering largely due to inflation, because they have to pass on the price rise to the customer. So they might be getting larger value realization today, but automatically consumers will cut back  they will go from large to smaller sizes, they will use things less frequently. Volume growth will be impacted.

A few companies may sail through because of the audiences they are catering to. If you are in the upper middle and upper segments, your chances of seeing a downturn are less. Companies like LOreal would be able to go through it much better because there is that rich segment, which is not impacted by the price rise because their disposable income is so high.

 

 

 

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