Rahul Gandhi, Congress, Marketing Myopia and Politics of Spokespersons

The April 1960 issue of Harvard Business Review carried probably the most influential article in the area of marketing titled ‘Marketing Myopia’ by Ted Levitt. Its first sentence went as:

‘Every major industry was once a growth industry. But some that are now riding a wave of growth enthusiasm are very much in the shadow of decline…’. It goes on to say that ‘the failure is at the top’

Now what’s marketing myopia got to do with RG, Congress and spokespersons? In TV debates it’s quite surprising to see how Congress spokespersons refuse to either  listen or show openness to ‘introspect’ or attribute the party’s decline to top leadership. On the contrary they blame it on opposition or competitors and also find faults with voters for not being able to see sinister design of their main rival, BJP.  Upon being quizzed about developments in Bihar and switching over of Nitish to BJP, they try to find faults him.

Levitt says, ‘The railroads did not stop growing because the need for passenger and freight transportation declined. That grew’.

 

Has the need for democratically elected government declined? Do people not look at government for governance and progress?   In fact the need grew with the arrival of new informed youth at the political landscape.  Why did Congress which once stood as the only party in India with footprints everywhere come under shadow of decline? It assumed invisibility of its product and believed there can never be a substitute product to replace it. Levitt explains why the once booming dry cleaning industry was stifled. It did not go in trouble because of better way of cleaning (direct linear competition) but because of unexpected source of synthetic fibers and chemical additives (unexpected indirect competition) that reduced the need for dry-cleaning. Congress could never fathom that competition could arrive from unexpected quarters in the form of Mulayam, Banerjee, Lalu and others. For it believed in superiority of its product.

 

Companies get caught in self deceiving cycle which is caused by assumptions that there are no substitutes, faith in mass production and preoccupation with product. There is no guarantee against product getting obsolete. If you don’t make it obsolete by your own effort the others definitely will. Congress’s faith in its formula was so strong that it failed to see the movement in market and emergence of new alternatives.

The cracks in the voter base of Congress were signals of latent misfit between voter expectation and what it promised. Yet it believed in the power of selling. Selling focuses on the needs of the seller whereas marketing focuses on needs of buyer. Its strategy has been persuasive which sought a change on the voters’ end instead of changing its own political product (old narrative). It attempted to fit a square peg in a round hole. The key is what a company offers  is not determined by its managers but rather by the takers. Congress has been so obsessive about its narrative, its win-ability that its perception couldn’t go beyond it. The emerging voters are not extensions of people who were enamored with the role Congress and its leaders played in freedom struggle.  The new generation is rational, clinical in approach, seeks gratification, wants good life and wants it immediately and they are believers of achievement not inheritance.

Congress must note that any industry including politics is a customer satisfying process and not merely  a  goods producing one. Therefore, political agenda begins with voter expectations not with what you have. This is the starting point and process should be worked out backwards. So don’t push RG and the old narrative. Shrinking voter base and loss of states is testimony to that.

Spokes persons of Congress please don’t look into mirror to create your appearance. It’s better to look out of window and find out what others want you to look like. In defending current leadership and agenda you damage your party more than strengthen it. The writing on the wall is clear: voters don’t want Congress in its current form so get to drawing board and do some visioning sessions.

Innovation, Disruption and New Consumer

A product is valued for its problem solving ability. For instance a watch measures time and camera captures images. This distinction becomes the basis of industry classification which gives rise to structure and strategy dynamics. Industry structure within which firms compete is defined by factors like seller and buyer concentration, product differentiation, barriers to entry and exit, degree of vertical integration and growth rate of demand.  The product based conception of structure accordingly etches boundary that divides one industry from the other. Firms ‘conduct’ (strategy) in a structure and produce performance outcomes. Hence a camera company like Nikon directly competes with another camera producer Nikon or a computer brand like Lenovo wrestles with HP. This view of competition is direct. Firms evolve strategy and develop success blueprint based on an idea of their competitors and their competitive behaviors.

 In a way industry conceptualization allows managers to identify which competitive space they belong and ‘not-belong’ to. Accordingly it lends ease in identifying competitors and their behaviors. Thus a car maker like Ford should fight with others in the car marketing space like GM, WV or Toyota. This is one of the ways to conceptualize competition known as direct competition. But a need can be satisfied by a different product. For instance transportation can be taken care of by a whole range of non-car products like cycle, scooters, airplane, and railways. That is a firm may face competition indirectly from products that ‘do not belong’ to a given industry. Managers often fall into a myopic strategy trap when they fail to factor in the implication of these indirect competitors. In this regard Ted Levitt had cautioned managers to answer the question, ‘what business we are in?’  It may be myopic to think of an industry in product or technology terms.       

 The competition indirectly can come from anywhere. The new emergent business environment is rendering the industry boundaries totally fluid and permeable. This is both a threat and opportunity. It all depends upon how far the vision of a manger can go.

Mobile phones are embedded with time keeping utility. Is it wise to consider that Nokia or Apple is not a threat to brands like Nikon or Olympus? Is a computer is computing or entertainment devise? Wrist watch is now being increasingly conceptualized as a ‘device’ with fluid functional boundaries. Many companies like Apple, Sony and Nike are eying wrist for potential business opportunities. Burg has already launched a device for the wrist which combines the watch and mobile phone space into one. This is a watch phone. Burg calls it ‘new smart watch’. Consider the following:

•  Sony’s Smartwatch has two inches screen and can show emails and twitter posts which it can extract from Android phone.
• Nike’s Fuel can feed a lot of data about your daily body statistics like calories burnt to a smart phone.
• Pebble can play music and display text indicating needed information
• Nokia and other mobile phone brands are building higher imaging capabilities.

 The linearity of thinking causes managers to seek incremental innovation. The accent is placed on betterment of existing value for instance, increasing the accuracy of a watch or refinement of reception of a television panel. But now the character defining core functionality which sat at the center is being decentered in many cases. A radically different perception is needed to view everyday objects. This depends upon an understanding of what makes sense to new emergent customer. It may be wrong to assume that the new generation is a linear extension of the previous one.

 Is computer something to ‘computing’ with or something to ‘accessorize’ with?

Kodak: Burden of being the first and the biggest

Long back Ted Levitt wrote in one of the most influential articles in the area of marketing titled ‘Marketing Myopia’; every major industry was once a growth industry. But some that are now riding a wave of growth enthusiasm are very much in the shadow of decline. Others that are thought of as seasoned growth industries have actually stopped growing. In every case, the reason growth is threatened, slowed, or stopped is not because the market is saturated. It is because there has been a failure of management.

Companies and brands as value creators and signifiers seek constancy. Firms seek perpetuity and brands aim to defy the effects of time. Both do not exist in a vacuum rather belong to environment which is always in a state of spin. A boat can scarcely stand still in water without right paddling and maneuvering. Levitt claimed that railroads and Hollywood declined not because of market maturity but due their management who wrongly defined what business they were in. At the center of their poor fate was not the lack of technical competence rather their orientation or mind set. Levitt cautioned that, in truth, there is no such thing as a growth industry, I believe. There are only companies organized and operated to create and capitalize on growth opportunities. There are numerous examples of so called growth industries which are either dead or dying have caught in self-deceiving cycle. Levitt cited a mindset characterized by beliefs that: growth is assured by expansion of affluent population; no competitive substitute; faith in mass production and preoccupation with a product which lends itself to improvement and manufacturing cost reduction.

Eastman Kodak Company gave this world first hand held camera. Along with the camera Kodak is credited among other things for Kodachrome film, electronic camera which sent still pictures from moon, first digital camera, OLED technology, and Kodak image sensors captured close- up of Mars. The company was quick to become a great success by introducing a paradigm shift in the way pictures was taken and who took them. Its user friendly products allowed everyone to capture everyday moments. The slogan ‘you press the button, and we do the rest’ epitomized the essence of Kodak brand- empowerment to capture and store moments for posterity. Technically Kodak replaced glass photographic plates with a film roll making the photographing process much easier and simpler.
Technological developments are not always linear and incremental creating product improvements. Often these are disruptive and out of box. Imagine emerging competition between mobile phone makers and camera makers. Consider how Xerox which pioneered photocopying was threatened by personal computers. Post offices have almost been made irrelevant by e mail services. In the similar vein, old cinema reel prints are fast becoming thing of past as new films are distributed through digital prints. The brick and mortar mom and pop stores in India actually face a real threat from e commerce ventures rather than the likes of Wal-Mart. The dividing line between the television and computer may further get blurred in times to come.
Kodak had its own share of challenged being unleashed by newer technologies both disruptive and incremental. The shift from black and white imaging to color technology was seized by Kodak which allowed the company to exhibit robust performance in the US market. Till the mid-seventies Kodak held monopoly position both in film and camera market. However things began to change with the disruption introduced by the invention of digital technology. As a consequence the sales of both film cameras and film began to decline. The business model akin to Gillette cheap razor expensive blades which allowed Kodak to make money by selling films and processing developed cracks as digital cameras neither needed film nor professional processing. And even prints could also be created on home printers. Kodak’s serious entry into digital camera business come much late in mid-nineties, though it had good product but its high price never allowed to get volumes. The company could not give up its film manufacturing (product centricity) till 2009 even though obituary of the technology was written long back.
The greatest irony is that Kodak itself invented digital camera which eventually blew off company’s business of making film and film camera. It is not that the need to capture moments and share memories has vanished it is just that newer products are better able to satisfy it. The window of opportunity for others was created by Kodak itself as it failed to appreciate the new technology using customer centric perspective. What others did to Kodak, the company should have done to itself.
Who says competition kills?