1 Mar 2010

Business sectors vs. User sectors

It beagan about two weeks ago, when a fellow Creative Director, Ramesh P, sent me an intriguing article published in the online edition of The Wall Street Journal by Dr. Y.L.R. Moorthi, a professor at the Indian Institute of Management Bangalore.

Granted it is not a well-edited piece of journalistic exposition, it does not even end conclusively. But in it's synopsis, it is nothing less than shocking. And true!

According to the author, in today's business, there is no identifiable competition to compete against!

To illustrate... A few years ago, neither Nikon nor Canon imagined that more Indians in 2010 would use a camera on a Nokia. No recording label expected more Indians to be buying music from a telecom company, Airtel (packaged as caller-tunes). Most airline had not anticipated losing more passengers in a year to video-conferencing services than to rivals in the aviation sector. And no-one saw the mobile device space being pushed furthest by an erstwhile search engine (Google's Android), a mere computer-maker (Apple's iPhone), and a much-maligned software company (Microsoft phone).

No business can tell who its next rival is... In short, it is full and total anarchy out there!!!

The article started a train of thought that slowed enough for me to catch-up only today! And here at this Thought-Station, I shall try to couple this still-chugging view to that of brands (and advertising) as mere commodities... And together let's where it all takes us!

I'll start here.

There are two types of businesses today:

One, creates a solution for a core user-group, and when assured of moderate success, splinters the offering into near-infinite variants - and with the help of Marketing and Advertising, tries to PUSH the solution to an wider audience in the name of 'growth'. In my opinion, this horizontal expansion serves nothing more than to dilute the brands appeal to the core user-group.

The other type of business, creates a solution for a core user-group, and when it sees moderate success, creates a new solution around the evolving needs of the same core user-group - i.e. they PULL user on to a new solution using advocacy and experience. Which essentially is marketing and advertising in a new, user-friendly package! This, in my view, is the sort of vertical growth that will differentiate successful brands in the future.

A.k.a, de-commodification, if I may!

To illustrate... What would serve an athletics brand better in the long run? Moving horizontally into the ubiquitous blandness of 'youthful, lifestyle'? Or vertically into innovative athletics equipment? They could be doing both? Sure. But not if they were serious about either!

I maintain that the brand that focuses on 'growing on' their core user-group would eventually grow stronger.

But what about advertising in all this?

What else, grow on the core user-group, godammit! Forget the 30sec TVC. Forget the 15% of press. Forget the 30% margin on production. Forget the formula. Forget being appendages of the Marketing Department. Let us reinvent ourselves, and become partners in product development. Create training modules for sales staff. Devise distribution channels...

Let's grow on our brands!

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