After global warming, the global meltdown is perhaps the most talked about topic, whether in boardrooms or chai stalls. But has the meltdown really affected India to the same extent as the rest of the world, especially the US? The Indian Marketing Summit organised by AIMA brought some interesting perspectives to light.
The Summit this year revolves around the theme of "Innovative marketing strategies in uncertain times". One of the sessions, titled Marketing Panchayat, raised some interesting queries. The panel discussion focused on the mindset required to take on the challenges of the economic slowdown.
Issues such as the priorities of marketing organisations in such times; concerns that need to be balanced and initiatives to invest in; how organisations can plan for downturns; the role of innovation; whether organisations should stick to the basics or look for radical discontinuities; opportunities within the apparent gloominess; and learnings from this downturn that could lead to doing business differently in the future were discussed at length.
Debating these issues were Mayank Pareek, executive officer - marketing and sales, Maruti Udyog; VS Sitaram, COO, Dabur; G Krishnan, executive director and CEO, TV Today Network, and Ishan Raina, director and COO, Out of Home Media. The session was moderated by summit director Santosh Desai, Managing Director and CEO, Future Brands.
"How many Indian banks or companies have shut operations? Which Indian companies have laid-off staff by the thousands? Just because the Lehman Brothers and the like go bankrupt and some US companies cut 30,000 jobs, it doesn't mean that it's all over for India too," he stated emphatically.
He maintained that marketers have to exercise caution. Things are changing fast and people are reacting; therefore, marketers too have to tweak their strategies. "It helps the marketer if he had foreseen the state of things," he said. One of the examples he cited was how Maruti had used foresight and tied up with more PSU banks as compared to private banks, as its preferred choice of financiers. Also, targeting the rural market during these times helped the brand, he said.
Sitaram, the next speaker, also began on an optimistic note. He stated that Dabur, as a brand and an influential player in the FMCG category, has seen substantial sales and growth in profit for the quarter ended December 31.
"Most FMCGs like HUL, Colgate and Marico have grown. So, where's the slowdown?" he questioned. According to him, the impact of the slowdown is not uniform across categories and geographies of the sub-continent.
As far as FMCG is concerned, the rural sector accounts for half of the industry. Since agriculture is doing well, the rural sector hasn't been affected by the slowdown to any great extent, and therefore, FMCG has done well too. Sitaram also quoted recent studies conducted by AC Nielsen, which show that Indian consumers are much more confident when compared to their US counterparts.
"The problem, however, persists in people's mindsets. With recession doing the rounds verbally, there is a lot of gloom in general. Also, the working population is wary about increments and perks, which in a way, has altered their buying behaviour," he said.
He advised marketers to change their strategies and try changing the mindset of the consumer. "The marketing guy needs to keep talking to his consumer, rather than sitting and fretting," he said.
According to him, India is going through an "emotional atyachar" presently, which soon needs to transformed into a "jai ho!"
Krishnan, however, adopted a cautious tone while addressing the issues at large. "It's a new animal, a new issue we are facing, and most of us never knew of it," he said.
He stated that though our earlier finance ministers had assured us that India is a de-coupled economy, which will not get affected by other leading economies, the assurances have proved wrong. However, according to him, there is light at the end of the tunnel.
"We are the only country that is poised to grow at a rate of 6.5-7 per cent in the times to come," he said. "No more can the world stand on one leg - the US. And this is the time that we, as a country, can prove this. It is a good time to make our presence felt in the world GDP and become a driving force," Krishnan added.
Sounding a word of caution, Raina asserted that it will take us another six months to come out of the mode of denial that we exist in now. "I think by end 2010, with the right kind of backups and plans, we should be able to come out of this turmoil. But before that, we have to pay a price, may it be salary cuts or other preventive measures."
So, while the panellists debated whether the slowdown was a mindset or a real problem at hand, Desai concluded, that as a solution, "We need both short-term and long-term countermeasures to deal with the state of things, as of today."