FMCG: Fast Moving Corporate Guerillas

In corporate India, till not so long ago, any marketing professional in the FMCG sector would typically have a long innings within the sector to his credit. Career growth was either vertical within the company, or horizontal, to other FMCG companies.
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Put it down to an absence of good opportunities outside the category or the lack of an appetite for taking risks, but instances of FMCG professionals hopping to other sectors were fairly rare. Today, however, more and more professionals from FMCG companies are moving to new sectors, helping pollinate marketing ideas and strategies that were hitherto unique to FMCG.

FMCG has, in fact, become the resource pool that almost every other industry is happily fishing in for marketing talent these days. Erstwhile FMCG professionals are the poster boys for sunrise verticals like retail, insurance, banking and telecom, and from marketing soaps and colas and chocolates, these fast movers are now chalking out strategies to market insurance, banking and pre-paid recharge cards.

For most professionals, the lure of doing something different in rapidly growing sectors is a big motivator. And while there are risks given the nascence of the some of these sectors, it’s a calculated move. For J Suresh, CEO, brands & retail, Arvind Mills, joined the apparel group in 2005 after spending nearly 22 years in FMCG, moving to a sector like retailing was thrilling.

“Retail had just started to boom and it was clear that it will be the future. The present position gives me an opportunity to exercise both my brand and retail skill-sets,” he says. Sanjeev Kapur, country head, marketing & innovation, Citibank, moved to the financial sector in 2005 after conducting an in depth SWOT analysis.

“As an economy develops, the services sector grows significantly faster than the packaged goods sector, and the contribution of the packaged goods industry in a buoyant economy comes down. Consumer services marketing will play an important role in emerging sectors in India,” he reasons.

Kapur opted for financial services to make the transition even more challenging. “Retail is closest to FMCG. I thought the most challenging leap will be marketing financial services as it is most distant from FMCG and therefore would offer the maximum learning experience,“ he explains.

Transitions to new verticals can be baptisms by fire, as Jayant Khosla, ED, western region, Bharti Airtel will vouch. He recalls the initial days after moving from Coca-Cola India to Airtel in 2004 as one of getting a complete comprehension of a new business that was accelerating by the day.

“In beverages, it was factory, quality and retailers, while in service the moments of truth are numerous. The network has to be there, dialling should be smooth, zero noise and efficient service like billing has to be ensured. It was like jumping on to a treadmill moving at top speed,” he reminisces.

For Vivek Khanna, director - marketing at Aviva, the move from HLL to an insurance company in 2002 entailed getting accustomed to the concept of low brand awareness was a new one. “In HLL, the business card was good enough brand recall. At Aviva, people would sometimes ask whether we manufacture telephones,” he laughs.

It may have been an entirely new terrain for the men from FMCG, but what stood them in good stead was years of battling for market share, and an understanding of on-ground promotions and marketing initiatives, and an emphasis on
research. Khanna, in fact, avers that his experience was the clincher for Aviva.

“One of the mandates was to generate high brand recall, and they felt my experience in the coffee business at HLL and the overall expertise was right for the job,” he says. Partha Dattagupta, CEO, Barista Coffee Company, adds that his move after stints at Cadbury and Agrotech were similarly received. “In FMCG, I was handling snack food, so it was not completely alien territory for me. I had some idea on consumer reaction to impulse food, beverages and traditional Indian food,” he explains.

The experience in building equity amongst trade channels was something that Khosla capitalised on from his stint at Coca-Cola. Back in Coke, there was a clear mandate for trucks to leave for the market by 8.30 am to pick up empty bottles and replenish stocks.

In telecom, speed to market entails picking up application forms immediately from retailers. “If there’s a delay, activation doesn’t happen on time as promised by the retailer to the customers. And if retailers are unhappy, they will not recommend our service,” he elaborates.

On ground initiatives, a key part of FMCG marketing, have been used by Khanna at Aviva. “In Delhi, we have branded traffic timers to create recall for the Aviva brand. These kind of soft promotions are frequently used in FMCG businesses,” he says. Performance awards used to motivate sales forces in FMCG is another initiated Khanna has replicated for Aviva.

Intense focus on consumer insights and research is high on every FMCG professional’s checklist. Naturally, keeping their ears to the ground, and a finger on the consumer’s pulse, is priority for the FMCG experts.

“FMCG teaches you core marketing process like developing media plans, advertisements and pricing strategies, and these have been built over years based on empirical evidences from the market place,” says Kapur of Citibank.

Suresh adds that days spent pouring over market research has convinced him to rely on proven consumer insights rather than on gut feel, “Even with fashion brands, which are reactive and lifestyle-oriented, it is necessary to have tangible evidence of lifestyle changes from the ground.”

The leap into new verticals has also served as a new learning curve for the men from FMCG. Understanding the market dynamics and new tools have enabled them to add to their repertoire of marketing skills. And with their current stints in various service sectors, they agree that they have come out the richer in terms of having a more holistic understanding.

“Marketing in FMCG can lead to offtake. In services, a campaign created on fundamentals of insurance may be good, but if the experience with the financial advisor is not good, customers won’t buy my product,” explains Khanna.

It’s the entire spectrum of lifecycle management of customers that FMCG professionals have had to contend with as they picked up the threads of new segments. “At one level, lifecycle management involves acquiring the customer and providing continuous triggers for her to use the service. At the second level, after understanding the demographics and characteristics, the effort has to be to improve share-of-wallet for your brand,” says Kapur.

Suresh, who spent nearly 18 years in HLL, realised that the lifecycle in apparel was much shorter than in the food business. “Every shirt is a different SKU. So one has to keep in mind season change, merchandising and stock outs. If the stock doesn’t sell within a month, it’s a dead stock. That’s a critical difference,” he says, adding that achieving higher operational efficiencies for each brand in the portfolio was another learning.

One of parameters these marketers had to adapt to was the quick go-to-market, which needed faster innovation cycles. At Barista, Dattagupta has to tackle a product cycle that’s faster than what he faced in FMCG. There, Dattagupta had the luxury of a higher development lead time with capex requirements; at Barista, the dynamics of retailing necessitates dexterity in product innovation.

“Here, there is a new theme around product launch every three months, where based on consumer and international trends, we come out with a range of products,” he says. He adds that work on new themes begin six months in advance, with the development of new products, supply chain feasibility and consumer feedback.

“One of the learnings is the quick feedback in retailing, there’s no need for focus group discussions to know how the product is doing,” he says. Keeping in mind faster go-to-market, Barista has a huge innovation funnel with around 50 to 60 beverages in the pipeline. “It is certainly higher than what one has in FMCG.”

Kapur believes that while in FMCG the S curve for innovation diffusion is gradual, in banking it is relatively steep. “In FMCG, product development typically requires capital intensive manufacturing upgrades which sets up competitive barriers for a longer duration. In banking the technology barriers to product & services improvement is relatively lower and not as capital intensive. So to retain competitive advantage, either the rate of innovation needs to be much faster or innovation has to be significantly disruptive” says Kapur.

Citing an example, at the bottom of the pyramid, Citibank wanted a competitive barrier for its offering targeted towards illiterate consumers. So the bank introduced biometric ATMs with voice navigation systems accessible to this segment of consumers using thumb prints. The difference in the belief system in marketing and branding between FMCG and financial services is something Kapur noticed early.

“In FMCG, certain values are taken for granted. Like minimum advertising spends as a percentage of revenue to make a strong consumer brand. It’s an unwritten rule and no one questions it. In new sectors, these principles will gradually evolve once there is more granular brand health data and better recognition of intangibles values while evaluating marketing ROI’s.” he explains.

While FMCG has a fair dose of high-decibel communication and activation, the move to new verticals also meant getting used to communication minus the razzmatazz. Kapur believes his current stint at Citibank has enabled him to acquire direct marketing skills.

“Skills like analytics are not as prevalent in FMCG as they are in financial services. In FMCG, trends are accumulated and used over a longer time horizon, whereas in banking, strategies change faster and frequency of use is higher,” he says. So initiatives like direct mailers, events and online are some of the new tools which Kapur has picked up at Citibank.
“Events are done at a strategic level like the Lakme Fashion Week, where the scale is huge. But in financial services, event-led marketing could be as micro as acquiring ten customers from Pali Hill, Bandra,” he adds.

Barista has no mass media advertising, and therefore, reliance on PR for the coffee retailing format is very high. It’s something that Dattagupta had to adapt to. “In retailing, a brand relies heavily on word-of-mouth. While in FMCG there’s passive interaction with the brand, at Barista, even the service from the brew master matters. So it’s a combination of products and other attributes as well,” he says.

And in the highly competitive world of telecom, Khosla has been able to look closely at the rural markets and devise strategies to foray into the hinterland. “There is a segmented approach to the business, unlike any other. From making factory visits every second day to marketing to rural customers, it’s been a new experience,” he says.

Thus, aspects like route to market, products and services introduction by segmenting the consumer pie is a learning which Khosla picked up at Bharti.


Source: Economic Times
 
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