Ravi Dhar is the George Rogers Clark Professor of Management and Marketing and director of the Centre for Customer Insights at the Yale School of Management. He is an expert in consumer behaviour and branding, marketing management, and marketing strategy.
Recently in Kolkata to attend the CII Brand Conclave, Dhar in an interview to Business Line spoke about how changed consumer behaviour has led to new challenges in branding, influence of the digital medium and ‘Brand India’. Edited excerpts:
Traditionally, marketing or branding was centralised at the headquarters. But the big change today is that combine and control does not work any more. It stops working when changes happen too quickly. The consumer behaviour, markets, technology are changing. And so branding too has changed.
In an old world, the branding was to show a 30 second commercial on TV and it would run for, say, six months. But you cannot do that online. People are not going to see the same advertisement again and again. So how you create advertising, changes. And how people react to it, also changes.
Now the brand is a combination of what you (as a company) say and what your customers say. You cannot control what your consumers are saying; but you can shape it and guide it. You have to let go of the control and yet make a brand. This has made brand building more challenging today.
Is consumer behaviour mostly responsible for the change in branding or marketing campaigns?
Advertising is the message from the company to the consumer. And if you ask people how many of them believe in the ads, they will be sceptical of it. What people value much more is what other consumers are saying – who else has brought the product and the experience. This has become much more valuable.
So traditionally, if you were a small company and you did not have the money; it was very hard to build a brand. But now, because word of mouth is becoming more important; we find that the role of the brand is becoming potentially less important in certain cases. Brands were proxy for information, quality and performance. But if I get performance and quality (feedback) from consumers, that’s more reliable.
However, a lot depends on product categories too. For example, in fashion, I may still care for the brand. In other products like buying a knife on Amazon, I will go for user reviews.
In the context of user review driven purchases, what is the role of the online medium in shaping consumer behaviour?
If you look at actual sales online for a lot of products, they are still in single digits. But in the early part of the consumer’s journey – the search for information – has migrated to the internet a lot. That’s why if the brand is not present at key points, you are out of the (consideration) set.
For example, mattress is something that you almost always buy at the store. But before that, a lot of search is done online to find out the way to buy, how they are different and so on.
Digital has fundamentally changed the consumer search behaviour and influences. And companies that don’t manage the process well are going to lag.
How important is it for the brand to adapt to change?
Brand is what you buy into. So a brand has to resonate with the consumer. As consumers change; what the brand stands for has to adapt to it. This does not mean you will have to always change the product. Sometimes you may (change the product) or change the form and packaging. But the messaging has to be something that has to be relevant. Else you run the risk of being labelled as ‘my father’s brand’ or old fashioned.
From a country’s perspective, especially, one like India, how important is branding initiatives to draw investments?
Branding is all about beliefs. And a lot of decisions we take are based on beliefs. In India’s case, (Narendra) Modi has created a business that the country is ready for business. A lot of business people say that the reality has not changed that much. But beliefs have.
So branding for countries is really important. It creates a platform when you are deciding between countries. Branding gets you in the consideration set and brands are a good short-cut to help you get attention. Under every good brand is a good product. But for many good products there are not good brands.
How is ‘Brand India’ evolving, with reference to the various initiatives taken up by the Centre?
Brand India started evolving much before. Twenty five years ago in the US, India was about poor, hungry and homeless. But then, thanks to the tech world, India suddenly became a genius. Brand India benefited tremendously from the success in IT. And, India has also done a good job in the service industry, particularly, hotels. Indian hotels always had very high levels of customer experience.
Now even manufacturing, something that was non-existent, is also benefiting from the idea that the country can do both software and hardware. Its an adjacency.
What is your take on these initiatives?
I think they (Centre) are doing the right thing. When you try to attract the $ 100 billion companies, they are already global and have information about India.
The campaign they (Centre) are doing is relevant for the mid-sized and smaller companies in the $1 billion - $5 billion range. They might have an image of India that still lacks reality. Changing that is the relevance of the brand campaign.