A hierarchy of segments

Over the last 10 years, India has witnessed an explosion in communications.

A little more than a decade ago, there was just one channel, and during the 1991 Gulf War, viewers eagerly waited for bites from CNN, to appear on screen courtesy Doordarshan. Today the viewer has a choice of more than 70 channels.

And the Internet? No longer science fiction, as it was just a decade ago. Imagine being told that a box would contain virtually all the information you needed, and could also serve as a meeting place, an education tool, a mailbox, and even a place of work.

The flip side of the coin is that the explosion of communication tools has made getting the message across more difficult. But it is exactly the opportunity that companies like the New York-based Wunderman, the largest direct marketing agency in the world, which has, as its company motto "Insight, Imagination, Impact" is looking at. Simply put, Wunderman is looking at "data-driven dialogue".

Here is how Daniel Morel, chairman, and chief executive officer of Wunderman, on a jet-setting trip to Mumbai in search of new clients, defines his task. "Do you want to sell to the amorphous mass of a 250 million strong Indian middle class, or do you want segmented sections?"

Wunderman sees an opportunity in the fact that as competition gets fierce, and resources leaner, more and more companies are trying to ensure that they speak only to the people who want to hear them. "You are looking at a sizeable market, and an unique market, but you have to target the most productive, the most logical target for your client. You cannot talk to everybody, you have to choose the most interesting target for your client. Not everybody wants to buy an expensive Ford product. You need to segment the population into a hierarchy of pockets," Daniel explains.

It is an area several companies including Ford, Citibank and others is looking at. What is worrying these companies is that in the flood of communication channels, the message is getting lost. "The need of the hour is to be direct, and to the point. But, you also must be sure that you are speaking to the right person, and in much bigger context than has been done until now in India," says Wolfgang Haf, president, Asia Pacific, Impric, a division of Wunderman.

What Wunderman does is "collect data, and then use it to acquire customers, retain them, and value them by knowing them". For example, birthdates are a valuable resource in the United States. The resource, simple to collect, is valuable in the hands of direct marketers. Just by knowing the age of a cross-section of people, the resource enables companies to target young people looking to buy their first car or home, older people who are looking for products that enable them to save money for the sunset years, teenagers in search of the latest gizmos, and newly-weds looking for that elusive honeymoon trip, point out the Wunderman executives.

However, one obstacle is the relatively low penetration of technology in India. While the middle class has access to a large number of communication channels, Indian conditions tend to be very different from that in the west. And the advertising sector is at least 20 times larger than its direct marketing counterpart.

For the same reason, Indian conditions offer a tremendous challenge to any kind of data collection for direct marketing. Wunderman believes it can live up to the challenge. Says Morel, "The middle class has not been targeted yet.. When I say targeted I mean having specific knowledge. Like Mrs Gupta lives at the corner of that street and has been a customer of Unilever products for the last 10 years, has four children, one of them is going to college, and the other three are at school. I don't think anybody has done that. With the techniques we have we can segment the population in a very specific way, and address this Mrs Gupta."

And this is the kind of segmentation that several Indian companies have expressed an interest in. © 2002 agencyfaqs!