Hemant Malik, Chief Operating Officer, Trade Marketing and Distribution, ITC
In an exclusive interview with Ashish Jha of Pitch, Hemant Malik, Chief Operating Officer, Trade Marketing and Distribution, ITC talks about how marketing has evolved over the years. Excerpts:
In a cluttered market, how do you ensure effective communication?
It is very important today to have a differentiated and distinctive proposition. If you don’t have a clear and strong proposition then your communication also reflects the same. Sometimes, with certain categories, we can use humour and can get away with it. Secondly, your ad should also be entertaining. Everybody watches TV for entertainment. The great balance of these two things can do wonders for a brand today. The consumer has become savvier today.
What other changes do you find in consumer behaviour today?
Consumers also make purchase decision on the basis of what they see. He also makes decision on the basis of what retailers tell them. So, finally the ‘moment of truth’ is when consumers meet the product. Today consumers want to read about the product, they want to make sure what ingredients are there and they want to see the quality. If they are paying a premium price, they want to know how it will impact their health.
Because there are many offers in the marketplace, consumers today has a choice which they like to exercise.
So do offers like discounts work?
Discounts and offers are something that marketers use to create buzz in the market. But there is no perfect strategy. Innovation on pricing is the need of the hour. If one marketer gives 50 per cent off, the competitor can even supersede that. But, finally you have to attract mind. Of course, today if you have a differentiated product, you don’t need to give offers. But sometimes you give offers because you have a new product and you want to facilitate trials for your product. So these reason always remain. But today’s informed consumers evaluate if ‘buy one get one free’ is better or ‘buy at 50 per cent off’ is better.
What is the perfect way to segment your target audience?
The basic of marketing is that a relevant product is created to suit a particular segment. If you try to sell everything to everybody you will not appeal to anybody. Magazine is the best category to learn segmentation and see how magazines have segmented readers. Ten years back, everybody would read India Today. But today there is a magazine for every interest group. So it is not about demographic segmentation only. You can’t only talk about kids, grown-ups, men, women… these are only demographic segments. The need is to go to the next level. You need to segment further within demographic segmentation and marketers even need to go for psychographic segmentation.
Are large format stores a boon or a challenge for a marketer?
As range expands, space constraint has come as a very important challenge. As new products get launched, maximising SKU (Stock Keeping Units) is posing a problem to traditional shops. Retailers today, want to keep the widest possible range. So getting your product placed and get visibility is becoming a big challenge for marketers. Also, consumers purchase decision is influenced by the fact what they see when they go inside a store. So, marketers need to spend lots of money on retail outlets.
Have we cracked the formula for rural marketing?
I think the challenge is about ‘reaching’ to rural areas. May be your communication can reach to rural consumers through mass media, but how do you make sure that your product reaches to them. Shopkeepers’ ability to invest in the range is limited in rural areas and hence they can’t keep all product. Big Bazar can place 25 types of biscuits but a rural kirana shop can’t place much numbers. Therefore, what model one can create to reach rural market comes at a cost.
Keeping in mind the different needs of rural market, marketers today have to be ready with different solutions at different price points. But for me, it’s not that lower price is for rural and higher price points for urban. Rural is cheap and urban is rich is not correct.
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