Ecosystem Marketing

Rajiv Banerjee
Like any other marketer, S Sivakumar, chief executive - agri business, ITC also talks about version 3.0. But it’s not about the trajectory when it comes to evolution of the consumers, but the business model - it’s echoupal 3.0, the next phase of ITC’s foray into the hinterland. But it’s not just Sivakumar from ITC who’s excited about turning a new page in the book. Because by the time e-choupal 3.0 assumes its final shape, a host of companies and brands will also stand to benefit. ITC may have provided the platform a decade ago. But improvising for the future and even the progress over the last 10 years owes something to what Sivakumar calls “a collective effort.” In short, it’s a trend which one will increasingly witness in the time to come - ecosystem marketing. Yes, a labyrinth of alliances and partnerships all aimed at fuelling the next wave of growth through the decade to come; growth that will be shared by and restricted to those who decided to collaborate . And it’s not just ITC who’s looking at creating an environment of long term strategic alliances, but even players like P&G , Intel and Nokia, who realise the importance of dependent growth to reach out to new markets. The concept of operating within an eco-system by theory and practise isn’t a new phenomenon. As Sumeet Vohra, director - marketing, P&G puts it; “even our ancestral farmers and traders worked in partnerships with each other and thus functioned within a beneficial eco-system .” What however has changed and made companies pay a greater degree of attention to creating a mutually beneficial environment is the Indian marketplace which has undergone a sea change in the last decade and is likely to change further in the time to come. “What has evolved is the increase in the number of players and hence the options to form ecosystems have multiplied. For instance, mobile and digital companies didn’t feature in the marketing set several years back, but are now strong pillars of the system,” adds Vohra. There are multiple triggers driving the need to create an ecosystem, the primary being meeting the consumer’s needs, both evolved and underserved. Take the example of ITC’s e-choupal , which according to Sivakumar works on the pivots of collaboration. The online initiative which started with four partners has now grown to 160 partners (brands, NGOs, governmental bodies and others) touching four million farmers across 107 districts in India. All For One The rural consumers, says Sivakumar are looking for solutions and not just products. “So to provide rural consumers access to complete services and solutions is like trawling in the deep sea. The transaction costs are high, therefore, an ecosystem approach is needed,” he states, adding that to create the whole chain, the objective is to get specialists in each solution offered on the platform. So the ecosystem created by ITC to reach out to rural consumers is also proving to be beneficial for Nokia, who’s looking at the same rural populace to fuel growth in India through Nokia Life Tools (Jeevan Saadhan). B V Natesh, head (emerging markets), Nokia India says. “The partnerships depend on how much a brand influences the livelihood of the target audience. So one looks at alliances from how does a partner benefit from it and what is the usefulness of such a partnership over a long timeframe for the consumers.” For instance, the eco-system Nokia is looking to create involves diverse players — from ITC and Syngenta to even the Spices board and the national horticulture board. An ecosystem, brands realise, works even in high clutter urban markets. The high octane growth in India has lead to a more evolved consumer prompting brands to look at alliances to satisfy the growing desire for an experience. Citing the example of personal computers, Prakash Bagri, head - marketing, Intel, says that the purchase of a PC swings from going to telcos for connectivity to procuring hardware to figuring out content. “Now they can access it from each player individually or the players can team up to provide a complete package,” says Bagri, adding that one harnesses the collective power driving towards growth.
And it could be driven by as diverse a partnership as one involving a technology player like Intel and a retail chain, Staples. “So the programme is all about configuring the PC the way you want and it is then delivered to you. There is a vendor and an assembler doing it for you,” states Bagri. In another instance of how partnerships can be forged between seemingly unlikely players, FMCG major P&G teamed up with Appleton, a player in the paper industry for fabric enhancers. “We found that Appleton had been utilising the ‘fragrance burst’ technology in the carbonless paper industry for the last 50 years. With this partnership was born perfume microcapsules in fabric enhancers at much lower costs,” says Vohra. The result — “cost savings, competitive edge and patent protection, our fabric enhancer category saw consumer wins in over six countries,” claims Vohra. The advent of ecosystem marketing has also lead to brands looking at a new monetisation model. Brand marketers like Bagri of Intel says that it has to move from the present ecosystem promotion , where one brand gets a discounted offer vis-a-vis another for tie ups. The quest for the right monetisation model however remains unsolved as an ecosystem involves both for profit and not for profit partners. So horses for the courses, brand managers say, is the only solution for now. “It’s a tough one for brands on how to monetise it. There are some models evolving but it depends on each segment,” says Bagri. Jasmeet Gandhi, head - services , Nokia says in the monetisation model between operators and VAS, there’s a certain way of doing business. “Aggregators go to operators, operators distribute it for them and they take a slice of the revenue,” says Gandhi. In the ecosystem way, the model involves looking at a producer of innovative ideas. “So you aggregate them and make it equitable for them so that there’s a process of continuous innovation.” In the case of NLT, Natesh adds that the company hasn’t gone through the content supplier and revenue sharing model. “All the players involved are ones who have a perceived need to be seen as a solution’s player. So it may not be an outright revenue model for them, but partners realise it’s a huge consumer awareness programme for brands which the conventional media reach cannot give,” he says. There’s also the scenario that looking at long term strategic alliances becomes a full fledged function within a company. Worldwide , companies like Philips have separate alliance teams who scout for new growth areas through partnerships (See: The New Equation on page 1). While some brands worldwide are breaking the responsibilities of short term quarterly objectives from long term vision, marketers in India believe there can’t be any trade off. “One earns the right to focus on long term by managing short term results. Managerial leadership is all about acquiring balance between responsibilities,” says Sivakumar. Gandhi of Nokia concurs; “Commitment to partnerships could be long term, but marketing to achieve an objective on the road is short term and is tactical.” Just as the new geo-political changes have resulted in balance of power shifting from one country to another, battle for more market share will mean keeping your eyes and ears open for alliances. For even a seemingly insignificant player can complete the picture and become the fuel for the next wave of growth.
(source: The Economic Times, Brand Equity)

Women on the steering wheel

Hi All,
As more and more cars come on the road, one of the interesting point has been the increase in the number of women drivers. Not only in Mumbai, i have seen it across other metros like Delhi, Bangalore and Chennai and it's not just the small passenger cars, but even SUVs that have women at the steering (minus the family). Started thinking as to what could be the reason behind this? Sure, affluence, better life styles are all there, but my guess is it's more got to do with freedom. So, even if one takes an upwardly mobile woman professional managing both work and home, it's possible that she's not in complete control in these two environment for a variety of reasons. However, driving a car gives her the complete freedom that she possibly yearns for in her normal life. Inside the vehicle, there's no one to tell her what to do, what not to do and she is free to accelerate or decelerate. Now, if that's the case, wouldn't be an interesting insight for a car maker to focus upon and communicate? In the world of segmentation, slicing the pie and creating a new segment riding on the sensibilities can help car brands break the clutter. Your thoughts on this please...

regards

Pepsi-Coke commercials

Hi All,
Saw the new commercials from Coca Cola and Pepsi involving Imran Khan and Ranbir Kapoor respectively. While getting the two youth bollywood stars does project a young contemporary feel to the brand, somehow, I seem to be missing the zing that was usually associated with cola ads. The smart ambush of Pepsi, Sprite and Thums Up taking sublte potshots at each other gave it an edginess and something to look forward to. The Paanch from Coke provided the rustic and tangy flavour to a MNC beverage brand. All that seems to have dissappeared. Internationally though, Coca Cola has some interesting commercials even now, but somehow the hatke pure Indian creative element is missing. Is it because that the goal post now has changed, from beverages to more action oriented categories like telecom and insurance which are more high decibel today? Or is it case of creative bankruptcy? Please share your thoughts.

regards
Rajiv

Rin-Tide Face Off

Hi All,
By now, everyone must have seen the Rin ad taking on P&G's Tide openly. I am sure there's more to come in the days ahead on this but wanted to check if there are any instances nationally or international of comparative advertising, where rivals brands have openly sparred? Do let me know and also do let me know what you think of the Rin ad running on TV?

thanks

Horn OK Please

Horn OK Please


Finally the broad contours of Brand Rahul is taking shape. In the last general elections which the Congress won a majority mandate, the scion of Nehru dynasty and touted to be the future PM was credited with providing crucial ideas, albeit remaining in the back ground. In the past few months however, Rahul Gandhi seems to have shed the tentativeness about coming to the fore. To begin with Rahul Gandhi has legacy behind him; an illustrious background which gives him the leverage against other youth leaders in India. But merely having the umbrella of the mother brand is only half the job done. And it has its flip side too, as expectations tend to be a notch higher when it comes to names with famous backgrounds. So make the brand accessible to create a mass appeal — jumping the security cordon to meet the common man, eating with them, mingle with the youth and of course, ride on the transport which takes millions back and forth. And as is evident, there’s nothing better than a dash of controversy or debate to create high recall — be it reality shows, IPL or even Rahul’s visit to Mumbai. Buzz marketing always works.
GO LONG , GO SHORT
MARKETERS have long faced this dilemma of should it be short term goals or long term strategic objectives? Meeting the short term quarterly numbers are as important as keeping long term marketing objectives of innovation, distribution which ensure sustainable performance of a brand in the long run. The solution to this conundrum is an interesting line of thought which is slowly emerging — separate teams for the short term and long term marketing objectives . Not necessarily working in silos, two teams however allow the brands to dedicate resources who purely look at innovation across the spectrum, while the other set is focussed on meeting the numbers every quarter.

Source: The Economic Times

Back In Action

After a long hiatus, am back to look at the world of marketing, branding and advertising. My views, views written as articles in publications is there for everyone to read and comment. I believe the only way i can learn is by actively engaging and sharing thoughts with like minded people. So please keep your comments and feedback coming

Congress 'Jai Ho' campaign

It made a millionaire out of the slumdogs and the song ‘Jai Ho’ became an anthem of sorts in a country that thrives on supporting underdogs. As the pitch builds up for the Lok Sabha 2009 elections, the Congress party is hoping it will be able to rake in a rich haul in India’s political Oscars, by acquiring the rights of the song. This month, the political version of ‘Jai Ho’ complete with adapted lyrics and the Congress message dominated the airwaves for four consecutive days, to announce the beginning of the campaign. Amitava Mitra, director - Delhi, Percept/H, the agency which made the films says that ‘Jai Ho’ is a curtain raiser for the Congress poll campaign and will play again before the close of the campaigning. “Jai Ho is like a war cry, but has a positive association,” he says.

Using the ‘Jai Ho’ soundtrack, three 60-seconder films have been made. The Congress slogan ‘Aam Aadmi Ke Badta Kadam, Har Kadam Par Bharat Buland’ was also woven into the song. To re-write the lyrics, renowned poet Ashok Chakradhar was roped in. Chakradhar says that the idea was to communicate the Congress message through the lyrics. “Here it’s not poetry, but a message to woo the voters. Therefore, even the words have been kept to bare minimum for impact,” says Chakradhar, who previously had produced a film in 1985 for the centenary celebrations of Congress. On the lyrics, Chakradhar says lines like ‘Kadam Hum Badathe Chale’ in the song was to encapsulate the work done so far. “It’s not India Shining because the films and lyrics talk about moving towards the objective,” he says referring to a campaign by rivals NDA in the 2004 general elections.

The three films focus on themes like heritage of the party and talking about the past leaders, achievements like the nuclear deal, Chandrayaan project and on schemes like the NREGS and education. In the Chandrayaan 60-second spot, the film is a report card of Congress achievements with visuals of Sonia Gandhi and Manmohan Singh interspersed with images of rural employment, education, urban development and even a mention of the nuclear deal. The film made by Percept/H uses footage from the Bharat Nirman campaign which was handled by the agency for the past two years. Interestingly ‘Jai Ho’ song was one of the ideas mooted by Percept/H among other filmy ideas which found favour with the Congress.