Tuesday, October 20, 2009

Tribal Marketing

The concept of ‘tribes’ isn’t a new one by any stretch of the imagination. Over a decade ago, for instance, Bernard Cova was talking about tribes and how people’s need to recreate new connections would impact marketing. But technology – and more specifically the internet – has now matured and penetrated society to such a degree that this tribal behaviour has now stepped from the pages of sociological textbooks into the real world.

Dr Marie Taillard, assistant professor of marketing at ESCP Europe business school, and a former colleague of Bernard Cova, explains the need to be in social groups. “A lot of my training is in evolutionary psychology and our forefathers needed to learn from each other in order to survive; in order to find food; in order to protect themselves against dangerous risks in the environment,” she says. “That is what we are doing now basically – we are learning from each other - where is the best place to find the right food, the right goods? What is going to make us feel warm and protected? And so on.”

As predicted, this change in social structure is having an increasingly large influence over the relationship that tribes have with businesses, as illustrated by Michael Bayler, co-author of ‘Promiscuous Customers: Invisible Brands - Delivering Value in Digital Markets’. "Consumers use social media to filter, resist and reject irrelevant or uninteresting messages, so the tribal consumer is quite happy, amusing himself in his own digital sandpit without having to give attention to advertisements in order to get media the way we used to,” he says.
“He can also get extraordinarily relevant and relatively trustworthy current information without paying for it and, again, without really consuming advertising. So the question for marketing is how do you get behind this line, to engage with the lost consumer, and how do you get invited back?"

Nonetheless, whilst there is definite agreement that the issue is of enormous significance, there is no unanimous line on how businesses engage with the tribes. ‘Tribal marketing’ remains more art than science.

Godin has suggested that tribes mostly consist of what he refers to as ‘sheepwalkers’ – people who have been raised to be obedient – and that there are tribes looking for people to lead them and connect them to one another. Marketers, Godin has suggested, need to be leaders.

Godin’s idea of ‘leading’ tribes has struck a chord with many readers, who have found the message inspirational. But others are less convinced. “Tribes often don’t have a leader,” says MyCustomer.com's Jennifer Kirkby. “Within a tribe there is reciprocity, which doesn’t suggest leadership. Firms may set up communities in an effort to lead them, but there may not be a leader.”

From Taillard's own observations of social communities, she has noticed several behaviours that characterise tribal interactions. “It is usually very democratic,” she suggests. “And you see different experts for different types of practices. For instance, you’ll see someone become the expert at greeting new members and they’ll always come up and say something nice when someone joins in. And then you’ll see experts on certain types of content. But to say that there is a leader in a tribe, or to suggest that leader might be the firm or the brand owner, is just not what I see.”

An alternative view
One alternative view of tribal marketing is that rather than leaders, brands must become the facilitators of the conversation - the provider of the platform. “In a recession, businesses should be focusing on the value proposition and the quality in their value proposition,” says Kirkby. “A value proposition can be built around being a platform and if it is to be a successful platform, the glue holding people there is often experience or emotion. Jeff Bezos once said that Amazon was a platform. eBay, Google and Facebook are all platforms. They facilitate conversations and this is what marketing is, in essence.”

“Creating a platform – an online place that is user-friendly and promotes democratic interactions – is where I think things are going,” agrees Taillard. “Sometimes these things will happen on the actual official site, but sometimes they will happen on another site and brand communities often will branch outside from the official website. Even then they should be encouraged. But I do think it is probably preferable to host them on the corporate website and to let them be as transparent as possible, meaning accepting negative comments about the brand.

“If we as marketers try to leverage these communities too aggressively and try to manipulate them in any way then the risk of backlash is absolutely huge. So I see our role as marketers as being purely one of facilitators and very hands-off - just creating a platform and possibly creating a set of rules for consumers to be able to engage on that platform, ultimately letting the communication flow between the customers.”

Stories and the self identity
So two potential avenues for tribal marketing are vying for attention – one in which leading the tribe is the chief goal and one based around organisations providing the tribal platform. But there’s still room for a third stream of thought relating to this as well.

“I would go beyond saying that tribal value is built around facilitating conversations,” suggests Bayler. “I don’t think people have a problem with conversations. I think the thing that the modern consumer is most interested in doing is telling stories on a day-to-day basis about themselves.”

This ties in with the work of sociologist Lord Anthony Giddens, specifically his book ‘Modernity and Self Identity’ – which pre-dated the internet – in which he wrote how globalisation and the increasing reach of the media would impact people’s sense of identity to the extent that in the future a large amount of social activity would be devoted to validating and refining one’s sense of self. In a world where Facebook is a cultural phenomenon, Giddens’ predictions seem eerily accurate.
“Time and time again, when I look at the really successful transformational modern marketing campaigns like Lynx and Dove, you’ll find that they have a couple of things in common,” Bayler continues. “One is that the brand is taking ownership of the dialogue around a particular subject area – for example, in the Dove Campaign for Real Beauty. They are also very pragmatic and a lot of them are about utility more than they are about entertainment.”

Engaging with tribes
Bayler points to Nike+, a successful ambassador for the Nike brand in the passionate running community, which is focused on users sharing stories about their feats. Also, high street adult chain Anne Summers with its Anne Summers Parties - a slightly different take on an all-female Tupperware party - that also brings people together to share their experiences.“It doesn’t sell a whole lot - the average sales at an Anne Summers party is a few quid - but think about this as enabling people to tell stories about themselves and to redefine their identity under the umbrella of a brand,” adds Bayler. “So for me, it is not just about conversation or facilitating conversation. It is about enabling people to tell stories about themselves and about each other. And I think that is an immensely potent vehicle for brand engagement.”

Whether tribal marketing should be focused on facilitating the conversation, leading the tribe or enabling users to tell stories about themselves, the debate relating to the dynamics of this field will inevitably roll on. But one matter does have unanimous support: that tribes are now a part of the social landscape and organisations will need to learn to engage with them if they are to be competitive.

“Brands have no choice,” concludes Bayler. “If they want to follow this consumer behind the line, they have to engage with the tribe. In order to engage with the tribe, they need to do something very interesting, which is moving from talking to consumers to talking through consumers.”

Thursday, September 10, 2009

Entering Indian Market

The last decade has seen India encouraging foreign direct investment (FDI) in almost all sectors including manufacturing, insurance, telecom, software, trading etc. This has lead to many international giants setting up operations in India, or entering into joint ventures with many Indian companies. It has become easier for international companies to trade in India as foreign exchange controls have been relaxed. Indian companies have also been allowed to raise money / funds from international markets and also invest abroad. Trade tariff levels have also been reduced for facilitating trade.

International companies can set up business operations in India by forming a new company, through wholly owned subsidiaries or joint ventures.

Private Limited Company
According to Section 3(1)(iii) a Private Company is one which
· Has a minimum paid-up capital of one lakh rupees.
· Restricts the right to transfer its shares (any restriction that enables the directors to maintain minimum limit of two members and the maximum limit of 50 members, shall serve the purpose).
Limits the number of its members to 50. This number does not include employees of the company and the ex-employees of the company who are still members of the company.
Prohibits the subscription of shares or debentures from general public.
Prohibits any invitation or acceptance of deposits from any person except its members, directors or their relatives.

Public Limited Company
According to Section 3(1)(iv), a Public Limited Company is a one which:
Is not a private company.
Has a minimum paid-up capital of Rs five lakhs.
Is a private company which is a subsidiary of a public company.
A public company cannot have less than seven members. There is no restriction with regard to the maximum number of persons who can acquire the shares or debentures of a public company.
The shares and debentures may be quoted in stock exchange and are freely transferable.

Opening a branch office
· Foreign companies engaged in manufacturing and trading activities abroad are allowed to set up Branch Offices in India after prior approval from Reserve Bank of India (RBI) for the following purposes:
· Export/Import of goods
· Rendering professional or consultancy services
· Carrying out research work, in which the parent company is engaged.
· Promoting technical or financial collaborations between Indian companies and parent or overseas group company.
· Representing the parent company in India and acting as buying/selling agents in India.
· Rendering services in Information Technology and development of software in India.
· Rendering technical support to the products supplied by the parent/group companies.

Foreign airline/shipping Company
· Branch Offices established with the approval of RBI, may remit outside India profit of the branch, net of applicable Indian taxes and subject to RBI guidelines .
Opening a project office
· Foreign companies planning to execute specific projects in India can set up a temporary project/site office in India for carrying out activities only relating to that project. The Government of India has now granted general permission to foreign entities to establish project offices subject to specified conditions.

Opening a liaison/representative office
· A Liaison Office could be established with prior approval of Reserve Bank of India (RBI). The role of Liaison Office is limited to collection of information, promotion of exports/imports and facilitate technical/financial collaborations. Liaison office cannot undertake any commercial activity directly or indirectly.

Tuesday, September 8, 2009

Dont Confuse Value with Profit: Tom Peters

For a guru of excellence, 2009 is hair shirt year for Tom Peters. "I had the chance and I remained silent – I could have screamed a lot louder than I did," says the co-author of the best-selling 'In Search of Excellence' and a dozen more. "What was going on around us was a level of wretched excess which in hindsight, one can say, 'I should have been blowing whistles'."

This criticism of unfettered capitalism seems particularly pointed coming from a man regarded as one of the world's leading business thinkers – and a prescient one at that. In his book on leadership published in 2005, he wrote: "We fall back, in these crazy and chaotic times on the command-and-control model of leadership, a model that no longer accords with how dynamic leaders actually operate." He has also written many times that we live in an age where businesses confuse 'value' with 'profit'.

We are all to blame....
Is he being too harsh with himself for not speaking out against the greed of the Big Money Corp? "In a court of law I can trot out the right words to be declared 'Not Guilty' but I find myself, and my fellow 'gurus' must share some of the blame, as must the business schools. Though we can't be held responsible for man's greed gene which has been evolving for tens of thousands of years, those of us who have pulpits should speak out." In these turbulent times, Peters thinks it ever more important to hammer home the fundamentals of business, that never change. This, he says, is despite the revolution in networking communications. "The five-year-olds who are growing up with social networking tools as second nature may change the whole business game in 20-25 years. At 66, I am definitely an old 'old guy' but these days you are an old guy at 25!"

Servant leadership
Being in his seventh decade has not stopped Peters thinking new thoughts. Many of these came out of an invitation to be the keynote speaker at the commemoration on the life and work of Peter Drucker a few years back. "One of the many things I came across was Greenleaf's book on Servant Leadership which I had first seen 25 years ago but hadn't really taken on board. In the situation we are now facing, the notion of an organisation which exists only to serve and a leader who exists only to serve those in that organisation is a damned good starting point. I use that fundamental idea around which to weave my current presentations."
Blanchard's notion of corporate worth extends far beyond stark profit and asset value. "Leadership should take into account the needs and concerns of everyone in the business and not just think that profit is a worthwhile goal," he says. Indeed, he has often suggested that profit should be viewed as the reward that organisations receive for being a good corporate citizen in the community.

Peters, the realist, recognises that many successful business leaders haven't yet got the point about their true servant role. He describes - in an unprintable way - the nature of those who abandon their organisations in these times, lured by promises of fat golden hellos and seven-figure bonus packages. "Leadership is a sacred trust – that is not extreme language. Leadership should be seen as an honour – you have an astonishing responsibility to those in your care." When he sees leaders abandon that trust – by quitting, retiring or making large-scale redundancies, Peters feels that they have failed in their duty.

Leading through the recession
These are times, he says, to try the souls of businesses. "To state the obvious, one's mettle is tested in difficult times. But I want to avoid like the plague that motivational speaker's nostrum: 'This is a time of great opportunity – get on your feet!' There is a strong bullshit part of this but I do believe you can treat this recession as one to be gotten through and one in which you can dig deep and think about the people to whom you are responsible. It is a chance to inaugurate a period of significant renewal. It is bloody immoral if you don't."

Peters calculates that few leaders under the age of 50 will have experienced a tough recession like this one. Despite this, he is optimistic that change will come - "I find that people are more open now to new thinking in running business," - and he feels that acceptance of the new regulatory regime agreed at the recent G20 summit is a key indicator of this sea change in the way we operate the capitalist system.

So who are the businesses and leaders who we should be using as role models? Are there any out there we should be watching? "There are indeed, but you and I have probably never heard of them. They are the guys leading small organisations who are getting through this crisis. They get up in the morning, go to their hardware store, restaurant or brokerage, help their clients, serve their community and help those seven people who work for them.

"Richard Branson and Jack Welch may have a lot to teach us, but there are an enormous number of effective and humane [he emphasises this word] leaders operating small organisations. 99% of them never make it to your website or the pages of my books."

Saturday, April 18, 2009

Is this the right time to invest in Indian Real Estate?

This issue, I am answering a question about real estate investment, which has been asked by Ms. Rajni from Jaipur. She wants to know is this the right time to invest in Real Estate? And if so, then where?

Dear Rajni,

Thanks for asking your question. I think quite a few people might be having this same question in mind, but are confused about the answer, more so after reading all kinds of reports in the newspaper. Let me try and help.

Based on my experience in Real Estate industry in India, almost all real estate developers were, so far, earning a ridiculous margin of ~30%. Nowhere in a developed nation, does a developer earn such a huge margin – typically there the margin varies anywhere between 8 – 12%.

Therefore, what the global recession & meltdown has caused is that it has actually brought the Real Estate pricing in India to a more realistic level. However, it is also to be understood here that the Indian developers, who are so used to taking the Indian customers for a ride, for so long, will still find out some very ingenious ways of fooling people.

Therefore, when you are looking at buying a real estate property, please ensure that:

1. You have done enough study about the financial condition of the developers in the market before you have zeroed on a couple of them
2. You need to read the brochure and all documents carefully, more so the fine prints, and show that to a lawyer who deals with real estate. More often than not, a developer only sells a bare shell apartment without even the door frames or switch boards, but the buyers don’t understand that as they are given a very different picture by the developer in the form of brochure and model apartments.
3. And most importantly, do proper due diligence of the project, ownership of land, viability of completion as mentioned, financing structure, etc.

Now, going back to the question - is this the right time to invest? Yes, it is. But not without a proper negotiation. All developers shall give you additional 10-15% discount on price quoted by them if you can negotiate well, without any changes in the payment terms.

But what are the markets that you can invest into? Based on the question I am assuming that you are looking at Real estate as an investment and not for residential purpose. In that case, Bangalore is looking quite good. Sobha developers, and I strongly recommend them, has come up with some new projects that fits perfectly into our bill. Chennai, particularly the OMR side, is again a good option – all major developers here have slashed prices like anything. Gurgaon is also a good option, so is NOIDA. I would suggest that you stay away from Delhi though, since the land price here would be quite high.
Another good option is Kolkata - this is one city which is not much affected by the recession in terms of its real estate, though some segments like Rajarhat, New Town, is quite badly hit. Areas to invest would be South 24 Parganas, or along the Hoogly river.

Among the 2nd tier cities, Bhubaneswar is a good option. Leave Cochin, but can bet on Trichy. Jaipur is avoidable, but Indore is a good option

Friday, January 9, 2009

360 degree Marketing

360 degree Marketing is all about creating a unique brand philosophy. It’s a way we merge our left brain rationale with our right brain creativity to nurture or establish a story around your brand targeted at all touch points of your consumers. Whether you're a business-to-business player or a clicks-and-mortar partner, or you're just trying to win your strong customer loyalty, the first and, probably, best step for you to take is to dig into your history. May be you have a golden store house somewhere that can be used to create your full 360-degree branding. A story that will keep your customers connected to you.

360 degree marketing is actually the evolution of "cross-channel" marketing - less about media integration and more about a consumer-centric media strategy. It not only includes a heavy online component, but also television, radio, print, events and other offline media.

The Online part of this holistic marketing strategy aims at engaging experiences to both educate and excite consumers through creative utilization of internet and mobile marketing space – interactive website, SMS and On-line Gaming (remember the STORY I mentioned earlier). However, the challenge here being designing a piece of creative that will work within the context of highly divergent media environments and managing these divergent media as well.

In today's market, consumers' self-service access to information means that messages must be consistent and coherent. Great creative is only a small piece of the puzzle. And there are clear signs that marketers are rising to the challenge of managing the complexity of the world and delivering much sought after accountability back to the board in the process.

Without doubt, 360 degree marketing is challenging: it is hard to keep track of creative work, oversee increasing numbers of agencies and ensure messaging is consistent and up-to-date across the board. And it cannot be managed effectively using the poor tools and processes still endemic across marketing departments.

Nonetheless, turning away from 360 degree marketing is no more an option.

For more information, please visit www.thesmartideas.in or send me an email at susmita@thesmartideas.in