Sumita Vaid
Interviews

Companies often do not have a consumer focus.

Shunu Sen, who believes marketing is a highly misunderstood term in India, has 35 years of experience in sales and marketing behind him. He joined Hindustan Lever as a management trainee and, when he retired in 1995, he was the marketing director of HLL as well as the marketing advisor to Unilever for its India businesses. To his credit are several successful brand launches as well as the complete turnaround of specific business divisions. In 1998, Sen found his motivation all over again in Quadra Advisory. As the CEO, his objective now is to make his marketing consultancy bigger, better and stronger. In an interview to Sumita Vaid of agencyfaqs!, he said consumers have become more relevant today than ever before and marketers who don't communicate better with them stand to lose the most.

Edited Excerpts

How did Quadra Advisory happen? What was the prevailing marketing/management situation that gave you the idea of starting something like QA?

It happened, I would say, by accident. Suhel Seth my friend, who is also the head of Equus Advertising, suggested that it would be a good idea for an agency to get into the area of marketing consultancy. When this idea was put forward to Sir Martin Sorrel, chairman of the WPP group, he thought it was a good idea too. He was keen on investing in a marketing consultancy. But it was spelt clearly that it should be kept separate from the agency operations. He raised this with me to find out whether I would be interested. At first I was not. I had taken retirement and I just wanted to sit at home, read books and listen to music. But Sir Sorrel got me quite interested and so I decided to invest in it. Both Suhel and I also invested as original investors.

But it was agreed that Suhel would have nothing do with this business. He would concentrate on the advertising business whereas I would concentrate on consultancy. Quadra is a joint venture between WPP, Suhel Seth and me. This how it started.

You set up Quadra much before entrepreneurship became fashionable. What propelled you to do your own thing?

Entrepreneurship was in vogue long before agencyfaqs! came into being! I do not think setting up consultancy is an example of entrepreneurship.

After I retired from HLL at the end of 1995, I had a small contractual obligation for Unilever, UK. Once that was over, I moved from Mumbai to Delhi. I had a lot of offers here in Delhi but I was not very keen. Then I got this offer from a friend to work with RPG. I took it up. There I held the position of president, marketing services, and group marketing advisor for RPG Enterprises. I was based in Delhi as I wanted to stay here for various reasons.

I had a very interesting time working in the area of telecom, a sector that RPG had invested in in 1996. I got involved with all the elements of telecom like cellular, paging 'sprint', basic telephony etc. I gave my advice; I was more of a signing board.

When I was working with the RPG group they were kind enough to allow me to do consultancy on my own, provided it was not with any of its competitors. So I advised some people but setting up a full-scale consultancy really came out of circumstances.

I really enjoyed working at RPG. But what I am doing right now is much better. I am glad that I am doing this.

So tell us about Quadra. What exactly is Quadra's area of expertise? Can you give me an idea of the kind of clients you have? What is your revenue model? What is your business turnover?

We call ourselves marketing consultants. And we have four broad areas of operation. That is why we call ourselves Quadra. One is developing marketing strategies, which is the total marketing mix. Two, distribution and sales. We are not in retail like KSA Technopak. That is not our area of expertise. Three, branding and positioning. Finally, we do marketing training, specific to a company. The training is in the context of culture, market and its need. So this is our area of expertise.

We have built relationships with clients in all the sectors. Some of them are Reckitt & Colman, Dabur, Wrigley's, Kimberly Clark, Henkel, Ranbaxy, Parle Agro, Rasna, AP Diary, TetraPak, Royal, Enfield, Eicher Tractors, JK Tyres, Castrol, HPCL, Philips Domestic Appliances, Godrej GE, Borosil, Usha International, Baron Electronics, ICI, Max Health Care, Sun F&C, Lifespring, Nirulas, CII, Indbazaar.com, Gottaswitch.com, shaadionline.com, everythingaboutwater.com.

But what exactly we do for our clients is something that we do not talk about. As a matter of company policy we do not work for competitive business for a minimum period of 18 months.

We have lots and lots of business. And we are making profits. We have been fortunate that we have had three reasonably profitable years. That is because we have invested in a corpus of very high quality people. Like any other corporate agency it takes time to build up capabilities and expertise. Though I cannot give you figures, I can certainly say that we are growing fast. Today, Quadra is twice as big as last year. And last year (2000) we grew by 50 per cent over the previous year (1999).

You have opened Quadra's Mumbai office some months ago. Given the slowdown in the industry, do you think this is the right time to expand? In any case, I feel you are quite late in venturing into Mumbai. Don't you think you have lost precious time due to this?

No, I do not think we have lost time. The Mumbai office opened up in November 2000. Even before we set up the office in Mumbai, one-third of the business was coming from Mumbai and 20 per cent form Chennai, Hyderbad, Pune, Banaglore and Calcutta.

We were keen to get to Mumbai. It was very much part our plans for the year 2000. One reason for it was that we were busy building up our services. And, mind you, we are technically only two years old. Though the company started in late August 1997, I joined in January 1998. Thus we really started in 1998. Then we had decided that in two years time - that is, in 2000 - we would go to Mumbai as it would be within our budget then.

In fact, I had considered moving to Mumbai myself and had started looking for someone for our Delhi operations. Then, almost from nowhere, Sukanya Kripalu (a friend) appeared and we decided to hire her. Within a day the decision was taken and she took charge of the Mumbai office.

The Mumbai office was set up despite - as you say - the recession because we are getting a lot of business from Mumbai and we are needed there. Also, you must remember, the recession is a very recent affair. It is only at the turn of the year 2001 that the signs became really visible. All said, the Mumbai office is really doing well.

Going back in time, tell us about the Levers experience… what was it like to work with what was then - and, perhaps, even today - the biggest spender in marketing and advertising?

Oh! It was wonderful. I could work there again.

I worked there for 35 years and most of it was in Mumbai. I joined as a marketing trainee and spent most of my time on the marketing and sales side. I ran the business of personal care products. It is the star business today. But, at those times, it was quite a struggle, which makes me feel that people expect success far to fast.

We worked under great pressure those days. I joined the board as the marketing director in 1984 and I remained there till 1990 when I became the vice-chairman of Lipton. Then I had my spinal injury in Bangalore and I came back and, for almost a year, I was in the hospital. But I had an overwhelming support from friends at Levers. After my rehabilitation, I spent some months in the UK before I came back and worked as group marketing advisor. I worked in many existing and new businesses like the ice cream business. In general, I helped grow businesses at HLL, but then, in 1995 I thought it was time to leave the company.

What did those 35 at HLL years teach you?

Levers taught me the discipline and the functions of a business. It is my Levers experience that has made me understand that the word marketing is still wrongly understood. Marketing, simply put, is creating customers at profit. The definition of business, again, is creating customers at a profit. And I have been saying this for quite some time now. Which is why I liked the slogan of this magazine (A&M) that said 'Business is Marketing'. It is true.

I believe that the responsibility of marketing in a company is developing strong brands. Just as a manufacturer's responsibility is manufacturing, or HR's is training people, similarly the marketing person's responsibility is brands. If there is a business that does not have brands it does not need marketing. That is why a marketing department should be renamed as a branding department. We should have brand managers instead of marketing managers who look after brands vis-à-vis the market. If you have a strong brand you have a strong foundation of a sound business. That's how I look at it.

My responsibility was to make a few brands strong. Lifebuoy was one. Again, I created market segments to develop a strong brand like Wheel, the detergent powder and bar. Lux is another example. Then there was Fair & Lovely that makes more money than many companies do. I think it is the single largest brand in the HLL stable today. I have also worked on Ponds, Close-up and Pepsodent. These are all very strong brands now.

Talking about brands, what is the measure of their success? Take Lifebuoy. It was a down- market brand and now it's trying its best to go upscale/assume an upmarket image. At least that's what its advertising suggests. Does that mean a brand, however, strong and successful, may lose relevance, its raison d'etre?

Brands are there to grow the business. Let me also take the example of Lifebuoy. Yes, the current advertising is an attempt in that direction. But still, even today, Lifebuoy is the biggest selling toilet soap in the world in terms of tonnage. And that is great. The test of success is not what Lifebuoy's role would be, but how completely it continues to generate and regenerate itself amongst its traditional customers. And I do not think it's down-market. It is mass. It has the widest of the widest franchise. To me, the test of success of the Lifebuoy brand is how strong the current franchise is and how its franchise has grown with times.

You have known HLL from a long way back. How, in your opinion, has HLL evolved over the last decade - especially after the advent of other MNCs post liberalisation - in terms of marketing and management? And how has its approach to advertising changed over the years?

I find it difficult to answer this question because the very strands on which the company worked then is actually not very different from how it works now. There is no perceptible difference. About six months ago I met some of the managers of Levers from across the world at a seminar. That was my first formal contact after a long while. And I really did not feel out of line. There were managers from the Middle East and Sri Lanka. It was all the same. In fact, there is a similarity in culture in all the Levers offices across the world. I do not think that anybody who has worked in Levers for four years or so would find much difference when they meet Levers officials from other parts of the world. The corporate culture remains the same.

As far as its approach to advertising is concerned, yes, it has changed in terms of the scales of the ad budgets. They are much bigger. The media is different. There are more channels now. Through my entire career at Levers there was only one channel. And that was DD (Doordarshan). The change is radical now, but, I would say, that the change is in the form and not in strategy. I do not think that the objectives or the methodology has changed.

Levers has always been a big spender and, even today, it is.

Coming to the evolution of marketing in India… what are the changes that the discipline of marketing has undergone in the post-liberalisation phase? Do you think corporates have really embraced the concept of 'consumer focus' or are they simply mouthing platitudes?

The main change, and the big change, is the complexity. Things are much more complex today. And thus the solutions have to be more comprehensive today. The quality has to be superior and focus better. There is more competition.

This is not to say that we had no competition earlier. We did. In the sixties we (HLL) had Tomco. In seventies we had 777 and Det. In the eighties we had the famous competitor in Nirma. In the nineties it was Proctor & Gamble. So competition has always been around but the intensity of it has certainly gone up. And the types of competition are far more varied.

As a result, companies have evolved. For example, P&G is focused as never before. Johnson & Johnson has become more aggressive. Look at the competition in the area of a commodity like atta or salt. Earlier we had atta from the local grocery shop. Now we have multinationals selling packed atta - like Levers, Pillsbury, Cargill.

Coming to the other question, consumer focus was always there. Levers had a marketing research department in 1979. Of course the techniques are more refined now. But, as I have grown with the industry, I have realised that companies, more often, do not have a consumer focus. Though they all claim they do. So you are right to an extent. However, I think, if you do not have anything to say to the consumer, it is better not to say anything because the results can be disastrous otherwise.

You were talking about how competition has increased post liberalisation. While many MNCs have indeed come into India, quite a few have been forced to eat humble pie. What, in your opinion, went wrong in the calculations of these multinational brands? Does it prove that the Indian consumer is a tough nut to crack? Or, do you think Indian corporates have done a good job of defending their turf?

First of all, I do not think the experience of MNCs in India have been very different from that in the markets in Japan or China. I think MNCs who have been in India for more than 10 years have done effectively better in India than those who have been in China for more than 30 years.

I do not think the success rate can be measured like that. I believe that it takes time for companies to settle down. For example, Levers' detergent business took more than 10 years to be profitable. The personal products business took more than 30 years to be profitable. Today it is the most profitable business in the world. It has a huge market. Another classic example is HLL's ice cream business. It makes no money. Yet, these are businesses that will certainly be very successful. I think companies should be working more on making stronger brands. Once they are through with the logistics problems, like the supply chain management etc, it is just a matter of time before they start making money.

And for companies that have been forced to eat humble pie, there was something intrinsically wrong with them. MNCs will make money. Take Reebok. It did not make money once. Now it is. The Indian Reebok is one of the larger Reebok companies in the world. There are more examples where MNCs have done well than not. Take brown goods, service, white goods …

Much of the distress among marketers now can be ascribed to the general slowdown of the economy. Entire categories are stagnating. What recourse do marketers have? What kind of opportunities do you (or Quadra) see in such a scenario?

In such a situation, the strongest brand will do the best. Consumer choice becomes critical and the price-value relationship becomes more important. I think people will invest more in the brand, which is the best. Second, it is the time to invest in the customer really well. Today they are more relevant than they were before. Therefore we have to communicate better with the customers.

What next on your agenda? Where do you see Quadra three to five years from now?

We hope to become bigger, better and stronger.