“Acquiring a customer is not the end of the marketing process”?
— Ganesh Mandalam
Gulu Mirchandani, managing director of Mirc Electronics, spoke to Manoj Khatri about the changing competitive and technological dynamics of the brown and white goods industry, the forces that are likely to influence the future of the industry and how Onida is gearing up to meet the challenges.

CEO of Xerago Consulting, Ganesh Mandalam, spoke to Manoj Khatri about the modern techniques of understanding consumer behaviour that are redefining customer management across all segments and especially consumer services.

What are the challenges that a modern marketing manager faces? What has given rise to these challenges?
Marketing has lost its edge. Around the world, organisations are questioning the necessity of having a marketing department. The marketing manager today is hard-pressed to answer the hard-hitting questions put to him by the CEO.

How many new customers have you brought to the company?
How much business value has your marketing efforts delivered?
How much of the company’s profits is purely the contribution of marketing?
And so on. Clearly, the traditional marketer has no available data to be able to justify his role in the organisation. Add to this the exponential increase in the difficulty levels of marketing to today’s highly informed consumer. Seth Godin in his path-breaking book Permission Marketing points out that the average urban consumer faces a barrage of over a million advertising and marketing communication messages in a day. The barrage starts in the morning when you open your newspaper while having your cup of tea. Then as you hit the road to work, the entire urban landscape is one large Andy Warholesque canvas of brand messages. You settle down at your desk and boot your machine. Before you can get to the business end of your mail, there’s the inevitable spam that you have to wade through. Then those irritating phone calls throughout the day promising you free credit cards with a credit limit that makes you think you are an Arab oil well owner. And as you retire to watch some TV, the barrage continues.
As a marketer, if you wanted to reach out to yourself, you’d simply quit.

How important is the role of customer in developing marketing strategies for tomorrow? How has this changed over the past few years?
No other function in a business organisation works under as dynamic an environment as marketing. And nothing can be more dynamic than changing consumer profiles, attitudes and behaviour. Till five years ago, one had to hunt for an LIC agent to pay one’s premium or buy a new policy. Today, one can get do it on the Internet or at the nearest post office or even better, one can simply leave a standing instruction with one’s bank. LIC has recognised that the consumer of today has no time to go to the vendor. The vendor has to come out of his ivory tower to where the consumer is located. The reasons could be any number - increased competition being one major one. The point is that LIC cannot ignore the changing consumer attitudes and behaviour. Another development in the consumer space is the growing diversity and individuality of each consumer. Take the example of credit cards. While most banks have a generic Gold and Silver card concept, even within the Gold card segment, there are various customisations - fee-waivers, free add-on cards, extra credit limits, balance transfer facilities, embedded insurance, etc. This makes credit card marketing extremely complex as every consumer would have his or her own requirements and each credit card account would have to be structured accordingly. The same can be applied to many other verticals like telecom, insurance, retail, travel, healthcare, etc. With the increasing service element in verticals like automobiles, IT and even manufacturing, many other traditional product verticals will soon face the problem of individuality. The core of marketing is identifying and understanding your customers. And critical to this intelligence is the ability to update the information in tune with the dynamism of the market environment. Given the individuality of each consumer, the task of gathering customer data and analysing the same becomes even more difficult. This knowledge remains a big handicap for marketers in India resulting in subjective decision making and higher hit and miss initiatives.

What is analytical marketing?
How is it used to optimise marketing strategies?
Marketing professionals, by nature, have to be innovative. Over the years, many new innovations have been introduced. When advertising became too expensive, Avon and Amway introduced Multi-Level Marketing and have become Fortune 500 companies. Multi-Level marketing has been extended in the Internet age through variations like viral marketing; member-get-member (MGM) programmes and affiliate marketing. Direct marketing, PR, telemarketing, web marketing and now SMS marketing have taken advantage of new technology to serve the need of the harried marketer. Most of the bigger advertising agencies today have more business coming from non-traditional advertising services than through mass media advertising. Today, the new revolution hitting marketing is analytics. The science of analytics has now entered the domain of marketing to provide that critical insight required by marketers to take better decisions. Using data mining theories based on varied sciences like statistics, artificial intelligence and psychology, analytic tools like Affinium Model and SAS can mine through terabytes of customer data and generate various business intelligence reports - customer profitability, cross sell propensity, attrition probabilities, and customer life time value. Coupled with the use of alternate channels (telephone, internet, email, SMS, direct mail), Analytical Marketing creates a platform for the marketer to precisely identify his prospect, understand his behaviour and pitch a product or service to customise his requirements, thereby increasing success rates as well as optimising marketing budgets. ICICI Prudential Life Insurance generates over 30 per cent of their new customers through analytical marketing. Across the world, the average contribution of analytical marketing is almost 50 per cent. The role of traditional mass media advertising is restricted to creating and maintaining brand awareness as well as working on the more subjective elements of creating brand equity. Analytical marketing provides marketers the critical infrastructure that can result in significant return on marketing investment and thus ensures the existence of marketing.

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