Practices, Protests, People and Time of Awakening

It will not be unfair to describe the current time as period of protest. People seem to be coming alive to practices and policies that governments and business adopted but failed to deliver. Many countries are reeling under vociferous often violent protests against people in power for their governance deficit. Failure at different levels has led people to protest against governments in different countries including Romania, Turkey, Egypt, India, Argentina and Libya.   The scenario is not very different in business sphere. Various corporate scandals have rocked share markets and shaken the faith of investors including Enron, Worldcom, Lehman, Freddie Mac and Satyam. In the social arena the things are no different. Things that upset include abuses of the rights of marginalized, women and child.

One of the major criticisms against business has been their failure see effects of their actions beyond immediate profits. Consequently, the sustainability and social ills have come to haunt consciousness and conscience of managers. The humanity has witnessed unabated plunder of resources risking the planet earth. The economics of consumption is putting the health and happiness of people in jeopardy. The People pay for their consumerist instincts cultivated by marketers by way of lifestyle diseases like obesity, stroke and hypertension. Overall, there seems to be something amiss.

A business or government is a collection of people and their consciousness. Each and every decision that theses bodies take does pass through their reason and rationality. So a government is run by its constitution and a business is run by its own mission. But the pervasive protests against both governments and business are symptomatic of some malaise that these systems suffer from.  Legality often overrides morality. Consider the following situations: should a burger be laced with ingredients that affect long term health of children; should insurance hide information in order to sell a policy; should a drug company sell a medicine below cost to patients; should marketing create perception of inadequacy to sell their products; should a company hire children to minimize cost; should government pass women reservation bill?

All decisions and hence questions are pass through tests of adequacy. Often internal adequacy is considered supreme. View all the above decisions from the prescriptions made by Milton Friedman who ties the corporate rationality to the statement that there is only one responsibility of business ‘to increase its profits’ and stay within the ‘rules of game’ (legality).  Ted Levitt’s prescription is that the purpose of business is to ‘get and keep a customer’. These prescriptions have an effect of throwing the issues of conscience and morality outside the scope of tests of adequacy that businesses often apply. Max Weber questioned: has money making truly become path to heavenly salvation in The Protestant Ethic.

The culture of ethical violations which has come to characterize our business and polity requires serious course correction in the way adequacies are defined. The shift to legality based governance is natural to nation state. The normative principles which people often acquired from social and religious socialization has become weak or taken a superficial form.  Therefore often religiosity (accent on rituals) is not accompanied by spirituality (transcendence). Whenever a scandal is unearthed, the most common utterances by political and business people are: ‘let the law take its own course’. ‘We have done nothing as per law’.  The ‘letter’ of law has become more important than ‘spirit’ of law.

The ethical issues embedded in decisions must be resolved by ethical reasoning. Morality or ethics is much more than legality. Immanuel Kant proposed that actions should be judged on the basis of their intrinsic goodness or badness/ right or wrong, not their consequences. Consequences do not determine right or wrong. The perception that legal is right is entirely misplaced and is at the root of many evils that our society suffers from. Legal may be immoral, therefore the actions must be judged from an extended framework of adequacy. The protests on the streets of the cities are manifestations of aimed to establish supremacy of morality over legality.  

Luxury, Transfunctionalisation and Dispensability

Marketing is a search for something material or mystical. Theoretically, marketing is about filling gaps or voids which leave people in a state of discomfort, displeasure and dissatisfaction.  Many brands therefore operate within the realm of what is needed; these fulfill need gaps, expressed or otherwise. Accordingly there are products and brands, the absence of which is likely to result in a state of annoyance and discomfort.  A necessity is something unavoidable or indispensable. Necessary goods are the ones which are essential for survival; hence they are indispensible like food, shelter and water. But no absolutes exist.  A necessary good for someone may be luxury for the other. Sunscreen lotion may be necessary for a working executive but luxury for a construction worker.

Luxury on the other hand is non-essential or unnecessary.  Luxuries certainly bring pleasure comfort but their absence is not likely to put life at risk. A watch is necessary for an MNC’s executive but Rolex is not. His travel to office is essential but driving a BMW is not.  And his signing of paper is indispensible part of his job but writing with a Mont Blanc is not. Luxuries in this conceptualization are un-necessary, dispensable and avoidable. So the big question is how marketers transform their inessential wares into something deeply coveted, cherished and wanted. The market for luxuries is huge and growing.  Luxury is a two tiered phenomenon.  First, the luxury connotations prevail at goods categories level and secondly, at the brand level.

Absence of a necessity creates a condition of discomfort and this gives rise to their marketing justification.  But then what justifications do luxury brands offer? So why must luxury brands like Mercedes, Jimmy Choo, Louis Vuitton, Harry Winston, Vertu, Hermes, Macallan Single Malt, Chanel, and Ralph Lauren be bought? Luxury brands develop their justification not by fulfilling the discomfort or annoyance void by functionality. The first building block at the heart of a luxury brand is its ‘inessentiality’. Luxury brands do not address to annoyances and discomforts rather they subvert brand narrative by pushing it into the realm of inessential, something which is dispensable for survival. The discourse about essential or functionality is opposite of the concept of luxury. Luxury in this construction implies discovering something material or immaterial that falls outside the boundary of the ‘essential’.

Is the concept of luxury universal? Luxury is a culturally constructed phenomenon.  For instance, a high carat diamond may not hold any luxury connotations for an African tribe. This is also true for brand building, the connotations or symbolism signifying (Nichole Kidman/ diamond dial for Omega Ladymatic) luxury depends upon culture.  A car denotes a vehicle but a BMW connotes luxury which is more than a car. A watch denotes a time keeping device but Rolex connotes luxury.  Luxury making is about making appearances and disappearances. In both these cases, the objects (car and watch) fade into background and some symbolic construction comes to forefront.

Luxury branding is about investing something ‘extra’ into a product.  This may take physical or non-physical form. Luxury brands transform the way they are looked at by their consumers. But then there is not universal way of looking at things. The way of looking at things is culturally determined. Culture supplies values, codes and norms which are then applied to decode meaning.  Objects can be viewed employing physical, mechanical, economic or social perspective.  Meanings operate at two levels. The first order meaning is about what it denotes and is functionally determined. The second order meaning or connotation is creation by the process of transfunctionalisation . Initially an object is devoid of any sign value. Luxury is not about denotation or functionality, it is about connotation.  The sign value (brand as signifier) is constructed by an interplay of socio-cultural process. Marketers use cultural as sign system to achieve this transformation, in which mass media plays a dominant role. Here the product is made to stand for something that it is inherently not by and interplay of signs and codes drawn from the culture.

A semiotic study of luxury watch brands revealed interesting findings as to how these time keeping devices are transfunctionlised into pieces of luxury- unique and highly desirable.  The five codes used by these brands were:  transfunctionalisation into jewelry which takes the watch away from its functionality. It is signified through design aspects like looks, diamonds, bracelets and availability at jewelry stores.  Second, luxury signified through quality or what is inside the case of a watch- the technology.  It is expressed through complications of movement, precision, sapphire glass etc.  Then there a code relate to jewelry is about watch’s construction with precious metals and materials like diamonds and gold. And lastly luxury is about scarcity and exclusivity. These brands create an impression of scarcity by not letting their brands available everywhere.    

Making of a luxury brand is about transformation of an object into a construct of imagination by systematic conversion of exchange value into sign value.

Brawn, Brain, Strategy and Micromax

What do you call a company which manages to touch Rs 2000 crore revenue and achieves third position (volume) in an intensely contested industry in just five years? The answer can be none other than, brilliant.

When it comes to thinking about electronics space only giants of the world come to mind like Samsung, Apple, Sony, and Intel. And narrow this search down to the field of mobile phones, the mind does not stray beyond a small but firmly established brand like Nokia, Samsung, Blackberry, HTC, Sony and Apple. Try stretching the category further the list gets enlarged with more brands but only with powerful (in own way) like LG, Motorola, Philips, Dell, and Acer. Prima facie it appears as if the industry is only meant for big and powerful hence a simple ‘to enter or not to enter’ analyses would yield a negative result. Any entry in such a situation is likely to invite fierce retaliation aimed to prevent the entrant from getting a toe hold in the market. The battle could really be bloody especially when players are armed and have deep pockets. But then, the joy of winning is in outmaneuvering and outwitting the big. When physical resources can’t be matched, the fight should be shifted from brawn to brain.

An opportunity identification exercise normally fails to yield structure defying perception and hence hints at the most obvious clusters of customers. The ‘most obvious’ ways of looking at the market creates majority fallacy (the attractive segments get more competitors than what can be absorbed). So when everybody is going up, it may be a good idea to go down. When competition is about ‘value enrichment’, ‘stripping down’ may make sense. A fresher structure defying perception is what is required to apprehend an idea which has been escaping the attention. So what makes Micromax, an Indian start up take plunge in a market of ‘big boys’ and steal the thunder under their nose?

Consider the implicit and tacitly agreed code/ structure: quality and price are positively correlated, aesthetics (form) is for the top tier and bare functionality is for the lower ends, new and innovation take time to diffuse (or reach the lower end of the market, cautious buyer); brand building (customer pull) is meant for the top players, push is the strategy at the lower end; and post purchase care is the preserve of top end brands. The codes of operation in a market evolve after a complex negotiation between the structural impositions and market considerations. Now consider how Micromax’s strategy is based on the reconciliation of the irreconcilables. An appropriate brand name (unlike Lava or Fly or G- Five, right for the technology space), functionality fused with aesthetics, and brand esteem (sign off ‘nothing is anything’, association with cricket events- IPL and Akshay Kumar).

First of all is Mircomax a challenger brand? Probably not. The brand did not rub the established players the wrong way by choosing to target the customers left out by them (deemed unattractive). It is first phone was aimed at rural market packed with a huge standby time (X1i- to take care of electricity problems) priced affordably at about two thousand rupees. It hit at the uncovered flank. Then their strategy moved on to target lower end of the segmentation spectrum.

The common wisdom narrowly limits the concept of value to price if the brand targets the economy segment. Micromax recast the value equation and focused on the total value proposition (TVP) rather than price proposition. The brand focused on maximization of TVP by simultaneously focusing on price as denominator and brand attributes as numerator. Factor in qwerty pad, dual sim, battery life, built quality (touch and feel), operating system, processor, brand esteem and confidence with the reasonable price. This is true for their other products like tab. People tend to be value sensitive not price sensitive.

The brand managed to create a pull by shifting customer thinking away from the price to the’ form and functionality’. This imbued the brand with aspirational value within its class. Take a look at brand’s A70 ad which showed an i-phone look alike with a headline which read ‘i-phone with a scribble ‘can afford this’in between ‘i’ and ‘phone’ making a complete line ‘I can afford this phone’. This strategy of linking Micromax with the iconic ‘Apple’ brand (incomparable) cleverly makes it comparable (similar strategy was used by Avis once upon a time ‘we are number two … therefore we try hard’). Twinkle Khanna acted out as endorser for its ‘Bling’ range, especially designed to attract women customer. The ads using Akshay Kumar seek to transform customer experience by instilling pride of brand ownership (‘Hide anything but your phone’ and ‘If you have it, flaunt it’).

Another distinguishing aspect of Micromax is its branding strategy. The brand instead of putting all product variants into one umbrella has very carefully adopted sub branding strategy to clearly signify segments and their propositions (avoid confusion). Consider sub brands in its range include Bling (style conscious urban women ), Ninja (android phone for working professional), Modu (technology enthusiasts), and Superfone (people who want applications). The company has been creating a portfolio of brand that is sync with emerging demographics and consumer life style. As dividing line between customers get sharply etched the use of one brand runs counter to market reality.

Starting as a mobile instrument player, Micromax has moved vertically and horizontally in the market- space of its origin. Its quest of growth has found expression in its expansion into adjacent space of tablet market (Funbook). The company has met with fair amount of success in the tablet space. In its latest move the brand has been extended into television monitor and home theatre space. Tablet and mobile phone appear to be in close physical and mental proximity hence success in one category may rub off equity well in the other. It is worth watching how this plunge of Micromax works out in consumer electronics space.

Often success breeds its own seeds of failure. The move to create a ‘be all’ brand militates against the idea of market fragmentation. One of the oldest icons of consumer electronics has been Philips. The news that Philips is moving out of consumer electronics was painful reminder of the fact that one brand cannot hold it all.

Justice, Learning, Marketing and Culture of Civility

One of the top most deliverables for the State is to ensure provision of justice. The concept of injustice is based violation. It happens somebody’s rights are violated or an unjust/ wrong act happens. Many expressions are related to injustice including breach of law, wrongdoing, misconduct, and unrighteousness. The rape in Delhi has lent a loud noise on the issue of injustice to which women in our country are subjected to everyday because of violations of different kinds. Getting the people to behave in the rightful way is a great challenge. This involves preempting the potential transgressions from happening. Ultimately it is about bringing a behavioral change.
In the marketing world, companies succeed by bringing about a behavioral change of their customers. They make people to learn to act in a particular manner. Companies and brands condition their customers to behave in a certain way that their objectives are realized. Take for example when groceries run out we rush to a specific store or we take a detour to locate a brand of our preference. We learn which brand offers the best value and when brands can be switched. Beneath the apparent randomness of our behavior lay a system of learning/thinking that equips us not to commit any kind of behavioral violation or ease hurt would be invited.
If we are oriented not to commit violations in consumption then why are laws violated rampantly? Market is a big learning place/space. Marketers bank upon various learning theories to bring about desired learning in their prospects. These are: classical conditioning, instrumental conditioning, rote learning, vicarious and cognitive learning. One of the important determinants of learning is reinforcement; it increases the likelihood of occurrence of a response. It strengthens the behavior.
Reinforcement is anything that follows a behavior and it may come as a pleasant or unpleasant happening. Consider how brands reinforce their purchase by offering a reward (positive reinforcement) or prevention of something undesirable (negative reinforcement): praise (Gucci), happiness (McDonald’s), confidence (Cinthol), accident saved (Ceat), and prevented body odor (Rexona), avoided theft (Harrison). Another type of reinforcement is punishment (unpleasant consequence after response) which ensures learning that a given behavior is not repeated. We learn not to buy petrol from a filling station (short delivery) or not to go to a shop (poor service).


Where do we learn to avoid law violating conduct or adopt lawful conduct? Unlike marketplace where stimulus-response- reinforcement work in tandem to bring strong learning about what to approach and what to avoid, there exists no workshop for civil conduct. As people begin to spend more time out of home, public spaces can be turned into open schools of learning. The first learning about the acceptance of violation begins with the road usage which later is generalized as an overall attitude toward legal system. If violations on the roads, especially the minor one, are made non-negotiable (reinforce with punishment) it will go a long way in building a culture of righteous conduct.

Victims on road, ‘It’s not my job’, ‘Going beyond the call of duty’, and Emotional buy-in

On Saturday (Jan 5, 2013) various news papers reported the callousness with which victims of Delhi rape were treated. As they lay injured on road exposed to the chill of December, badly brutalized, mentally wrecked, police personnel squabbled on jurisdiction instead of rushing to help them.

There are hundreds of fabled instances in service marketing that demonstrate how good organizations train people to  go beyond the call of duty to satisfy customers. These include how a FedEx employee climbed a barbed wire fence risking his own life to deliver a package containing blood to a patient and a UPS manager hired an entire plane and diverted two others to make a delivery. Disney cast members are trained to anticipate customer needs and respond to them immediately. A nine year old burn patient needed a cream. Since it was not available  nearby, a call was made to the supplier company. The customer service representative made it available knowing that it involved working on a holiday and breaking the rule of not entertaining an order of less than fifty cases.

Services involve intersection between customer (citizen) and provider (police).  These points of intersections tend to be human unlike a computerized robot welding a part on an assembly line. Automated manufacturing systems rely upon SOPs to preempt deviations (quality failures).  Rules and SOPs have made a way into service systems in a big way. For instance McDonald’s service  consists of a number of activity based SOPs like order taking and assembling a burger. SOPs are developed to achieve standardization but an over reliance upon them can have a dehumanizing effect. Consider how disgusting it is to deal with frontline people like human robots such as air- stewards and call center employees. The quest for efficiency pulls organizations into standardization mode but it may not be the most desirable way of dealing with situations that involve human interactions.

Service encounters involve an interplay between customer expectations and delivery by service personnel. Therefore the first starting point for developing quality systems  (SOPs) is to fully and accurately understand customer expectations. This involves a complex exercise into knowing and delivering. But in the given case (brutalized bleeding victims on the road) does it really need rocket science to discover and deliver what is expected? It is likely to make your heart pound and the impulse to help can’t be controlled. But the squabble over jurisdiction signifies how emotions are mediated by mind- when you need to feel you think. Some emotions are universal like happiness, sorrow, surprise, anger and disgust. We are surprised at the mechanical response of police and why they did not feel anger and sadness to go beyond the call of their duty to help the victim.

Exceptional situations call for extraordinary response.  Mostly crime creates exceptional situation for the victim but  for police or doctors it may just be an ordinary situation (‘we see this every day’) which gives rise to the concept of the job (the work you have to perform). This gives rise to important questions: does the repetition of dealing with crime (victims) make people insensitive (used to)? How does a rape or murder degenerate into a statistic and hence our attitude to dealing with the victim? How do emotions get mediated by reason?

Policing is a serious business that involves lives of people. Many service organizations look for ‘emotional buy in’ in selecting people for the job involving customers beyond qualifications (indicators of IQ). That is, how emotionally satisfying a job is for a person in term of its ‘meaningfulness’.  When a person opts for a job for ‘existence’ reasons (need based, salary, power, and progression) the work becomes an ‘imposition’ from the organization. The performance in such situations is unlikely to transcend the requirement barrier to avoid penalty. On the other hand if job offers meaning beyond the ‘existence’ considerations (I want to help people in need/ contribution beyond self) the performance is likely to transcend the minimum performance standards. This explains why lowly activities like sweeping floors or cleaning shoes become highly valuable and meaningful (higher order contribution) in a Gurudwara or a temple.

In certain jobs it is very important that ‘right’ kind of people are attracted. Policing is one of them. Policing is transformational, it provides opportunity to people to ‘make a difference’ in society. This discourse on ‘higher order’ contribution and ‘meaningfulness’ is unlikely to ring bell with all therefore it is important to revisit our recruitment system and ensure that people with right kind of mental makeup join the service.

Honey Singh, Lyrics, Images, Rape, Identity and YOLO generation

Who am I? What do I stand for? Where am I going?

These questions are so simple that they don’t get any attention. Simple is obvious and obvious is ignored. The YOLO generation – you only live once, especially in their twenties do not have comfort of latching on to cultural categorizations to construct their self and the new is not yet fully emerged. The windmills of liberalization and globalization have rendered the old structures obsolete. The new generation is caught in the situation where the old is not completely gone and the new has not yet fully emerged. The khap diktats, civil society outburst, consumerist culture, rise of the nonsensical movies and lyrics, are all manifestation of this chasm and friction. With the blurring of boundaries the new generation is left on its own to seek answers to the above questions.

The people of the new nomadic tribe are robbed of identity and their privileges that stemmed from fixed social structures. Take a macro look in a metro station or a mall, the humanity stands homogenized but take a closer look and everyone seems to be on a perpetual identity construction voyage. The deeply entrenched power structures are shaken and there is emergence of the new ones. Market is now supplier of symbolic material and consumption is no longer about satisfaction but identity construction.  A Scorpio and an Audi radically differ from each other in their supply of symbolic meaning to one at the steering wheel. Both can’t latch on the old identity structures based on who they are, therefore brand is commissioned for both identity creation and signification.

When the system fails to provide the notions of identity, people are free to make a choice. It is now upon the will of an individual to construct the person he or she wants to be. Consumption in this context gets beyond the realm of utility to acquire symbolism. The choice although free, operates within the overall constraint imposed by a set of possible selves made available in a socio-cultural context. It is not that people choose from a set of infinite selves. Media supplies a limited set of images, symbols and models differing in narrative. Popular media is one big supplier of images and models which are picked by people in arriving at their identity definitions. Primafacie people are said to be free to make a choice but it operates with a constraint imposed by total available set. Culture industries provide repertoire of symbolic products out of which free will is exerted. Bacardi ad says ‘be what you wanna be…’ but images of people portrayed- supply of symbols- narrowly push to you to be ‘the kind of person you should be’.

Each aspect of the environment is laden with symbolism. Popular media as an important part of culture producing industry is a dominant supplier of identity construction resource. The expression of this process manifests in choices that people make – what we buy and how we behave. This influence is so subtle and sub conscious that it escapes conscious scrutiny. The codes of behavior are implicitly established.  Bacardi has very successfully managed to create a new symbolism around rum and establish acceptance of white rum in the youth market. Relationship can only get sanctified if you wear a platinum band, so are you a part of group called ‘platinum people’? Love has got a new expression.

When the identity is fluid and undefined and when we look out to symbols in identity construction process is a song by Honey Singh a potential threat? If diamonds which have very little practical utility can be ‘women’s best friend’ and chocolate can say it ‘better than words’, lyrics can certainly creep into our consciousness taking a sub-conscious route. The blanks of mind are imprinted with ideas supplied by the media to a great extent. The expression of the concept contained in the lyrics would be dangerous, even if it happens in one exceptional case.

Citizen movement, business and democracy

Systems are designed to deliver. Business organizations are meant to ‘create customer’ by providing satisfying value. ‘Consumption is the sole end and purpose of all production’ (Adam Smith). Consumer formed the centre of neo classical economics. Marshall proposed that goods that provide consumer with greatest satisfaction, pleasure or utility will be bought. But are consumers actually provided with goods which do greatest good for them or for the producers? The market mechanism eventually creates a power structure tilted in favor of the producers and consumers generally are reduced to receiving end.

Consumer movement took roots in the US in early twenties with the publication of a number of books which brought the fraudulent and unfair business practices. In response to subversion of consumer interest the fragmented atomized structure of consumer system began to organize into a cohesive countervailing force. An organized chorus was raised for the State to enact legislation designed to protect consumer interest against unscrupulous business practices. The response of business to this development was predictable. Consumer movement was perceived to be a direct threat.

Democratic system produces two classes by a process of free electoral selection. The exercise of franchise produces an asymmetric power distribution. The very idea of ‘for the people, by the people and of the people’ gets subverted when people here implies the people elected not the electorate. The organization of people either as consumers or citizens is symptomatic of malaise in the system.
Faced with disillusionment, initially it is an attempt in communication which can escalate into seizure. The business took organizing consumers with a pinch of salt, like a threat to their interest. Similar seems to be the response of people in power to recent outpouring of people on Indian streets.

 

There cannot be a better gift than an idea for improvement. Many companies consider consumer complaints as free feedback about what plagues the system. The complainers are often rewarded and encouraged. British Airways under stewardship of Sir Marshall systematically promoted complaining behavior in order to discover areas of improvement. Systems exist for the so called ‘subjects’. The recent public outcries about laws against sexual crimes and corruption are two important ‘ingredients or features’ that people want from ‘product’ of governance. These two presented a golden brand revitalization opportunity to politicians and political parties but they failed miserably.

Like marketers and their products must reflect the needs and wants of their consumers, the government must produce outcomes that are in sync with the sentiment of its people.