Innovation is Key to drive growth in stagnant FMCG landscape.

Innovation is Key to drive growth in stagnant FMCG landscape.

Established FMCG companies in India are struggling for a double digit growth. Most of them are either in single digit or showing a negative trajectory. Old strategies no longer seem to be working and management is not showing confidence in launching NPDs or value creation through innovation. In this scenario, Brand managers need to go deeper to find out reasons for sluggish consumption.  What is it that compelling consumers to consume less or go for value degradation? Can it be attributed to a weaker/bleak economic outlook or a socio-cultural transition of Indian consumer? Or can we take a bold stance to say that FMCG brands becoming commodity and are no longer able to add value in consumer’s life?

Lack of clarity or reason codes lead to frequent changes in strategy and short term approach which often create more ambiguity in the system. Lower/Middle management starts hitting in dark, leading to frustration and chaos. In most common scenario, frontiers start executing things which comes from top management out of fear. This is the most dangerous situation to be into. Taking my learning’s from Jack Welch’s straight from the Gut, Top management needs to adopt firm & stable approach while dealing with issues. Getting into dialogues with middle/lower management often help in building confidence of frontiers to try new things.

Here I go with my attempt to decode the reason codes for current situation:

T o drive growth, either penetration or consumption needs to be intact. Unfortunately, both seem to have failed as demands are stagnant across SECs. Companies are trying to boost the demand by offering value thru consumer promotions/price offs. But again these are short term and your brand may fall in the price/value trap. Let us look around adjacent categories such as QSR/Fashion/Automobile/Smart Phones/Sports accessories etc. They are growing at a healthy double digit. Brands in this space are able to add value in consumer’s life and are helping them differentiate and make a statement.  While most of the brands in FMCG space are behaving like a commodity and no longer helping consumers to differentiate. You will no longer be able to extract more out of a consumer (Increase consumption) unless you are gratifying his evolved/new needs (Be it a functional or emotional).  Price off /consumer promotion might help you retain a consumer but remember this is not intrinsic to your brand. You are more vulnerable in this case; a new entrant may offer more and can take your consumer away.

The reason for brand switching is no longer the failure of a brand to perform but its inability to cater to the need in a different way. Analyst may say that this is not the right time to launch NPDs or create value through innovation in stagnant market. But, I have a different point of view. New product/innovation will bridge that gap of lack of differentiation and will give consumers enough reason to try/include your brand in his repertoire. The element of differentiation/innovation can be brought in various other ways:

1. It could be a more valid/interesting new RTB (reason to believe) Example: Lifebuoy; silver technology - Purana Gaya Naya Aaya https://www.youtube.com/watch?v=fcOzf2aKsGc 100% Germs free.
2. It could be through extending Brand proposition into a completely different category; example Dettol Surakha : Saaf dikhane wale Kitchen me bhi germs raha jaten hai https://www.youtube.com/watch?v=fDlDy_tKtvA
3.  It could be in the form making statement and having a point of view; Example Gillette’s  Shave India Movement : Stand up for a women https://www.youtube.com/watch?v=b4aiso6pvRE
4. Could be in form a gratifying a latent need (India uprising /a stream of nationalism) Example: Baba Ramdev’s Patanjali: Swadeshi/Instilling the whole lot of pride of being an Indian brand and bringing out heritage of Ayurveda in most palatable formats.

Marketing professionals tend get bored/fatigued in stagnancy and ambiguous situations.  HR buzz words; shelf esteemed, fighting attitude, capacity to think Bla Bla... look like more a Jargon/Gyan than anything else in real spirit.  Guiding teams to do new things/Innovation will help them be productive and get going in their learning curve.

Having said so, it is not easy to reinvent the brand proposition and come up with a winning/Innovative solution in crisis situation. It has to be built in to the organisational culture, a culture where people are not rewarded /reprimanded for success /failure but for their intent.

References:

Artiticles

1. http://www.exchange4media.com/digital/indian-qsr-market-likely-to-scale-$4.1-billion-by-2020_64570.html
2. http://economictimes.indiatimes.com/industry/services/hotels-/-restaurants/indias-qsr-market-to-touch-rs-25000-crore-by-2020-assocham/articleshow/49504930.cms
3. http://www.livemint.com/Companies/D6la6rk2jQ77EkOJwemgNO/FB-to-become-a-Rs-38-trillion-industry-by-201617-says-st.html
4. http://www.intelligencenode.com/knowledge/whitepapers/Indian-Fashion-Retail-Report-2016/ (Growth in Indian Fashion retail)
5. http://www.livemint.com/Industry/bulpIdEod7tk9HTftdo9bL/At-764-growth-India-fastest-growing-passenger-car-market.html (Highest growth in Passenger cars in the world)
6.  http://indiainbusiness.nic.in/newdesign/index.php?param=industryservices_landing/329/1 (Passenger Car Growth at 11.1% Year ending March 16)
7.  http://www.forbes.com/sites/kathleenkusek/2016/07/25/the-death-of-brand-loyalty-cultural-shifts-mean-its-gone-forever/#7e18f384e44d
8. https://hbr.org/2008/06/harvard-business-ideacast-100  : Innovation at P&G

Books:

1. Straight from the Gut :  Jack Welch
2. The Game Changer : AG Lafley & Ram Charan
3.  Our Iceberg is Melting: John Kotter 

An evil aspiration...

"Rajiv Gandhi's killers are being set free, I am saddened by this. I am personally against the death penalty but this is not about my father.. If a prime minister's killers are being released, what kind of justice should the common man expect"  You got this wrong Mr. Rahul. Who cares of Common Man? Unfortunately, it has nothing to do with common man, but an evil aspiration of those who belong to no body, for whom just/unjust has got no meaning as long as it is helping them remain in Power.

People who were found involved in the murder of Prime minister of the country by Supreme Court of India are set free by the Chief Minister of union of India. On what ground someone could do this? Do we have examples around the globe of such nefarious decisions where the murderers of a prime minister/president are given walk over? At least I could not recollect any.

It can be attributed to populist stance to raise Tamil issues to gain sympathy votes. She wants to portray herself as strong Tamil leader who could take stands against centre to gratify Tamil’s sentiment. She did it at the right time, and was expecting huge PR for her heroic act. She was expecting people in Tamilnadu to come forward on road to support and people in rest of India to come on road to protest her. Fortunately, people in TN and outside did not come true to her expectations. Neither congress nor other Political parties gave her enough reasons to play this prank.

In fact, Supreme Court’s decision against release of murders is a tight slap on the face of gratifiers of separatist elements. Personal ambitions cannot be above national interest. People with such evil ambitions are dangerous than the enemy from outside the boundary.

Jai Hind

“NAMO a Brand Manager who can sell comb to a Bald”

I have been closely monitoring quite a few popular Brand Mangers of a Company called “Indian Democracy”. Though most of them have never been to any other Business Gurukuls, their marketing acumen seems to be quite impressive. Some of them have left their corporate and defence counterparts miles behind. If Alive, all the war fare strategists including Sun Tzu, Mao Zedong and Von Clausewitz would have put their hands together to applause them . Amongst all, I am in love with the brightest one who is really a dude! Who operates from its strengths.., Turns obstacles into opportunities.. He is into selling dreams and showering hopes to its core TG.. He is known for acting on time. He speaks what people like to listen.

Operating from Strength: He puts all his strength in digging out a mighty grave for competitors, be it internal or external. Who doesn’t know the treatment given to his predecessors both national and Gujarat Cadres.  80% of his speech is dedicated for bashing up congress. He calls UPA not a dream team but a dirty team, blamed PM of selling poverty to Barack Obama and accused the Congress of using the CBI to fight elections. He is not scared of taking irresponsible steps such  as taking up a demeaning joke of a Pakistan sponsored Youtube channel vedio which claimed that Mr. Nawaz Sharif has called our PM a “Dehati Aurat”. He did not even confirm it with Barkha Dutta who was part of the meeting.

He won’t venture into what is he weak at; He doesn’t use his thundering oratory for the new set of policy goals and a new set of system to challenge the UPA’s Food Security Bill, MNREGA, RTI, foreign Policies, India’s Stand on neighbouring countries. What he thunders about is India will export arms and ammunition to other countries, Will teach lessons to Pakistan and China, Will bring black money, blah..blah.. few! Narender Babu.. lekin Kaise?? Tum kya Bajrang Bali ho? Brother, you have spent 10 years in Opposition condemning the UPA’s corruption and indecisiveness. But where is your alternative decree of governance??  

Believes in Jo Dikhata hai Wo Bikata Hai (Visibility at point of Sales):  He is visible for his speeches, he is discussed for his aggressive (Though arrogant most of the time) stands. He knows what media needs to increase TRPs. He does things which will get noticed. My recent visit to Gujarat; I was on highway, I was Glad that we have roads of European standards. But was Sad when my car got off highway to small towns of Dholka, Kheda and Sidhpur. Roads of small towns of 36Garh, MP and Bihar are better placed than Gujarat.

Champions positioning: He poses to rule a business-friendly government in Gujarat, then why is he not charting out plan which will bring economy on track? Can the Gujarat model become an all-India model? NAMO, holds more than 10 strategically important departments, you may call it army of one. The One Man Dictate may facilitate better government in a particular state. But can it become a role model for a country as diverse as India? The Lokayukta Model in Gujarat, works on “for the Government and by the Government” model. Do we want that model replicated for the rest of India for the sake of change?

Let us do a quick situation analysis which will help us understand the reason of his Devine popularity. It is established fact in the global politics; when things go well, people do not worry about their leadership. They want a cool dude to rule the country and start living with let it go attitude. But when things go wrong people look for the opposite. They want their leaders in control. They like somebody who is not scared of conflict. They start loving anybody who is vocal, loud and give them assurance of things will be alright. Let us also understand, what is he good at? NAMO understood the needs of a society defined by the communication and information revolution. The PM hardly ever takes voters into confidence. But, NAMO seeks out newer audiences and his social media outreach is his strength.

As a consumer, I leave you at your discretion but with a subtle caution to put your rational antenna up before falling in an emotional trap to buy a brand/product which might be seldom of any use.

Jai Hind

Political doomsday? It’s time to react

I was seriously thinking of not taking political subjects to blog on… Lokpal, corruption, fast of some baba... Blah... Blaa…  Now I can’t be inert over the whole political turmoil created by ruling party.  Oh Yes, forgot to mention my faith in current Government. Though, my faith for the party was due to lack of strong alternative. 

Corruption charges with proof, one after another.  The party is getting exposed at all fronts and in almost all geographies.  I can bet, even Mr. Soft can manage better than glorified squad of economists, educationists, lawyers and what not.  In my eyes they are an underestimated Gang of Hastinapur (Ancient Name of Delhi). Ben Ji (Didi) got it right to get off board of a sinking ship, while Mr. Soft is waiting and watching being at fence. It is important to mention that Madam Ji had great expectation from rebellion Nitish. Off late he also, declared that his alliance with BJP is intact. You know it well… how difficult it is to ride on TN Tiger/Tigresses.  

None the less, we had great expectation from media which is yet in its adolescence stage. Media is considered to be 4^th pillar of democracy. Strength of that pillar is in question especially after release of sting operation carried out by domestic steel tycoon on Zee TV Senior Officer Mr. Sudhir Chaudhary.  As per the sting operation Mr. Sudhir is alleged of extracting Rs. 100 Crs. as advertising commitment in exchange of dropping reports on alleged irregular allocations of coal blocks.   

The bigger question today is to trust whom? It is more like picking the least corrupt from the list of corrupted. But the person with least corrupt status is an outcome of lack of opportunity to be the most corrupt. In such scenario Media and apt usage of right to information will play an important role. A fair media which is just not only bothered about TRP and advertisement commitment but brings fair and logical discussion is imperative today. I am scared, if people will get accustomed to live in doomsday. Then, scams, weak law and order situation, widening economic/social gaps will not be subject of discussion. And so, we all will be nurturing an apathetic society.  I wish, am wrong with my interpretations of the subject.

अर्थकारी च विद्या

There is phrase - "when in Rome, do as Romans". We are talking about International standard of education in country where guys from the super schools (Read international curriculum) will have to perform & compete in India with a per capita income of Rs. 56K per annum. Our country is ranked 134th in human development Index (Not to undermine). The challenges will be not only of economics but humanities. We should not follow the system which suits respective countries. We shall emphasise on a system which suits our requirements.

I was under impression that Indian kids are better performing than their counterparts worldwide. I was in myth till I came across a release in TOI, few days back. As per the article, Fifteen-year-old Indians who were put, for the first time, on a global stage stood second to last, only beating Kyrgyzstan when tested on their reading, math and science abilities. India ranked second last among the 73 countries that participated in the Programme for International Student Assessment (PISA), conducted annually to evaluate education systems worldwide by the OECD (Organization for Economic Co-operation and Development) Secretariat.

Though I do not believe too much in all these survey but it is important to build capabilities and competencies to cope with the challenges which Future India will throw on our Kids. This where so called international system might be less effective..

When I was kid, I was not allowed to play much. My music classes were not appreciated. I got a bicycle when I reached my class 8. I used to curse my parents. Today, I thank my parents including my lovable cha-cha for being so strict to me. Whatever small or big I am, it is due to that treatment. I am not justifying them. But, I have a strong logic for that. My parents were aware of the fact that, they may not be able to support my hobby, which might not earn money to support the family. My family was a system, where education was an investment. They had to follow economics as they had no choice with their limited earning.

Today when I am parent, the challenges are different and so the point of view. We wish to have 360* development of our child. No harm whishing but, sounds more like a management jargon with less scope of practicality. Today I am open to accept the choice of my kid and support her to opt her profession. But still I believe that the core of any form of education or profession still lies in its ability to make the student economically independent.

My grandfather used to tell me this Famous quote from Chankya’s Arthshashtra “Arthkari cha Vidya” (Vidya Wahi hai jo dhan uparjan kar sake)

How Intolent is the tolerent India?

Indians are known for tolerance and non violence. It’s never considered as a weak notion but has been seen as the strongest adjective to describe India. It is land of Caucasian, mideterian, Mongolian and many others.. It is land of Aryans, Dravidians and ethnic tribes. Land of Hindus, Jains, Buddhist, Muslims, Christens and Sikhs. The soil and water has potency to adopt the diversity and nourish all the cultures to co-exist and sometimes mingle. We are known for our strong logical thinking. We have accepted critics and welcome critics with great maturity.

I am an Indian with modern outlook yet very possessive about its culture and heritage. It hurts me when I see we are deviating from the core and trying to redefine the adjectives of our definition. We show anger, frustration and intolerant attitude about pettiest of things. We allowed the mock of the strongest democracy (So called by sheer number but not the quality). We cannot manage an outraged pressure group. The recent Selman Rushdie episode has hit the right of voice/opinion in India. How different we are from China or any other hardliners. Literature has been the strongest weapon for an intellectual, we cannot deprive him of. I was reading TOI today, where, editor has blamed congress for not able to address the issue with great ability. I humbly disagree with you gentlemen. Its not the political party but the people are responsible. If congress act against the sentiment/pseudo protest of a particular group, the other political parties will in cash it. Why can’t all political parties have a consensus in dealing affairs with such stature?

Some of us throw shoes/ink/slap and Few of us pat shoulder of such a timid coward individual who try to act Bhagat Singh and Raj guru. We are not in our senses. Violence and intolerance in any form shall be condemned in civil society. Imagine we all start claiming ourselves as competent authority to punish, deliver justice.. What will be the situation of law and order in the country? Any person of that repute is equally good or bad in some or others perspective. It is not about RG, RD, SP or any ABCD.. If we as a Nobel citizen start supporting these kind of acts, the victim could be anybody. The result could be slapping a rikshawala.. Slapping a person who overtakes u.. Slapping an elderly govt.  babu  for some or other mistakes.. Youth are more vulnerable to follow such aggressive stance.

Being intolerant will not bring accountability in the system. It has to do a lot more with socio-economic equation of a civilized society and practicing moral science which we use to study when we were kids. Before a follower of any religion we all are human. An ethnic tribe of santhal pargana has equal stake in the country.

Dilemma of UP voters

Young Indians are going above of caste, creed and religion. We have seen progressive attitude of voters in state elections of Bihar, MP, TN & WB. But UP has unique problem.. They have to opt best amongst all the worst. Leaders with no vision for its people always lead to anarchy. Till 1960 up was one of the developed states of India. You all know the status of the state today.. We all know that NOIDA/Ghaziabad can fetch revenue for the state which could turn UP around. But who wants to develop UP? I am clueless which coalition will work better.. Let us hope for the best. Here i go with an analysis of paralyzed political scenario of UP:

Voters along with political parties have accepted the fact that results will be chaotic with no clear motion to party X or Y. I could see congress and BJP not in the race to form government but to support either SP or BSP. Congress doesn’t have any strong face in UP for the post of CM and BJP is no different with absence of strong local public figure. SP has to do a lot to shade away its goon typical perception. With projection of Mr. Akhilesh as gen x party is repositioning as a progressive and adoptive party. But still going by its proven theorem of MY factor.. BSP worked for development but in autocratic way, which back fired her. BSP is a clear no for intellectual class.

Outsourced leaders of other state are not helping BJP workers to connect at grass route level. What is working for them is the support of service and business class that too when congress is thrashed at center for Lokpal and black money and scam fiasco. Lack of strong Brahmin leadership will not be able to connect with orthodox Brahmin lobby. Brahmins votes are not going to one particular parties, so the parties are actually not bothered about them..  However, BJP is trying to get anti-incumbency vote against congress desperate move to lure Muslim vote. But lord Ram alone will not help the party. The agenda is done till death.. Riding on intellectual class may not work. This class do not form herd and are always divided on their own individual opinions. I could see BJP could be the biggest loser in UP poll.

BJP and its sophisticated political moves doesn't go down the gut of rural India.. Rather our rural counterpart don want to understand it.. What bothers them is caste, creed, diesel price.. Fertilizer, electricity.. food prices (gone up) an average farmer in rural India is happier than ever. Congress holds master degree of that lingo.. BJP is still an under graduate scholar of rural lingo.. They have yet not learnt from their failure of India shining campaign.. Only ad agency benefited out of the campaign.. RG has taken UP poll on his heart; I rate him as one of the passionate politicians going all out to establish his credential. With all top Brahmin leaders campaigning in UP. Brahmins may shelter to their old and trusted party. At the same time the orthodox clad of the Brahmins may still not come to congress for their pro Muslim moves. I still believe that congress posses political maturity to manage secular equilibrium. Congress will gain in UP election but will not be able to make its CM in states. However my vote goes to congress.

I wish all the best to UP voters.. I wish democracy wins.