MUMBAI: Packaged products are being marketed as services in the post Internet era! It is more about desire rather than the need factor!
These are some of the observations made by Ogilvy & Mather vice chairman Asia Pacific and executive chairman O&M India, Ranjan Kapur at BusinessWeek’s CEO Insights series – “Deepening reform – embracing change and competing to win in global markets” – held at Mumbai’s Oberoi Hotels today.
Brands are created in economics of plenty and the current competition era has resulted in ensuring that marketers seek the support of customers to co-create value. While addressing a session on collaborative marketing titled “How corporations and customers co-create value”, Kapur said: “The Internet has played a huge role by creating a paradigm shift in the manner in which marketing is conducted. The earlier differentiation between marketing and sales has been demolished as the Net enables marketers to reach out direcly to consumers.”
However, Kapur also noted that the post Internet era has taken us back to the good old days when similar structures used to exist in the absence of media such as television. “Television is a one-way medium in which half is wasted and marketers don’t know which half is being wasted. The Net creates a two-way dialogue between customers and marketers,” Kapur added.
Kapur added that TV sells products and services in a scenario which is different from the one in which marketers have created their strategies or R&D. Therefore, there is a strong possibility that TV doesn’t deliver the results foreseen by marketers.
“Currently, packaged brands aspire to be experimental just like service brands always did. Marketers are looking out for multiple points of contact with the consumer,” Kapur said. The IT revolution has enabled the creation of e-brands which encourage instant gratification for both consumers and marketers in terms of sampling, promotion and sales, Kapur said. Also, technology and WTO (World Trade Organisation) tarriff barriers have ensured that low priced products need not necessarily be called as low quality products. The key, Kapur said, is to ensure sustainable value which can be obtained by marketers over a period of time.
Kapur however cautioned marketers to avoid falling into the trap of mass media utilisation which prevents customisation. “It is imperative to recognise the importance of the last mile contact which has to be personalised. Take lessons from the nearby grocery store or the milkman who remembers personal details of the customer and never forgets to strike a rapport using simple tools,” Kapur added. 
Impulse is the key driver for sales at the retail end. Referring to a recent WPP research finding, Kapur pointed out that 60 per cent of women brought more than what they planned to buy. Less than six per cent of the women stuck to the list that they made in their house before starting out on the exercise. More than 25 per cent of the women change their opinions about brands at the retail outlet.
Having said that, Kapur said that service is the cornerstone of success. When there is a disconnect at the trade or distribution channel level, there is a huge problem which might affect the company in the long run. Value for money is a key proposition which marketers must remember at all times.