MARKETING SPECIAL... J S RAJU OF WHARTON SPEAKS ..Social media has the potential for co-creation

J S RAJU OF WHARTON SPEAKS 

Social media has the potential for co-creation

Professor Jagmohan S Raju, Joseph J. Aresty professor and director of Wharton-Indian School of Business Program was recently in India to give a lecture on marketing in emerging economies.A quick primer on marketing in troubled times. Excerpts

    Many international brands are making a beeline for India. What are your thoughts about the India story?

    India will continue to offer great opportunities. The fundamentals are good, the people are ambitious and the population continues to grow. If you're a business person you see more consumers, rising income, education taking people out of poverty and as a consequence purchasing power on the rise.

There has been a lot of talk of the market slipping towards a recession. Is marketing relevant in a recession?

Marketing is more relevant. Of all methods used in a recession, companies start by not focusing on the topline, but on the intermediate. How do I cut costs? They try things that don't work. Eventually everyone realises that the best way is to focus on the topline. That's where marketing comes in. Of course we are responsible for making sure our marketing investments are productive and give returns. But the theme of marketing as a field is to focus on the topline.

How practical is this theory? Take auto companies in India for example. There is a definite slowdown and hit on sales, but they continue to be big spenders.

The question is what would happen if they were not making that investment. Marketing is not just advertising. It's the product lines you have and what you offer. Maybe consumers will keep the bikes longer. If they keep it longer, will you be able to service them and take full advantage of customer lifetime value? If people don't buy new bikes, they may buy used bikes. So are you in that business? If they keep their bikes longer, they will need new spare parts. Have you recognised that?

How has the field of marketing changed since you first entered the space?

    The dominant way of thinking about the consumers has gone through a transformation, over the last 25 years. Much of marketing in the past was the domain of a psychologist — consumer psychology, which is still very important. But now understanding the customer has become much more data driven. So for example your ability to manage and analyse data is a very important component of marketing.

    Earlier a statistician would understand behaviour on a sample of 100, now we observe millions of consumers and what they do. A sample of a hundred can be managed by a statistician, but for millions you need computer science skills.

    So the fields that have influenced marketing beyond psychology are statistics, economics, operations research and computer science. Another area that is becoming very critical is sociology. Now we have groups of customers, because of Facebook. It's no longer how an individual behaves but how groups behave and sociologists understand group and society behaviour.

How well are marketers who are more or less in their 40s adapting to new media?

There is reverse mentorship — where a junior mentors a senior on things the senior may not know. We all have to learn and once we learn our judgment will play a bigger role.

New age and digital media claims to be more measureable than traditional media like TV or outdoor. Your thoughts on this?

Methods of measurement have always existed, what was missing was the will and willingness to measure. New media companies use measurability as a selling tool. And we always say they measure the things they want to measure and don't measure what needs to be measured. Whatever they can measure, they throw at you and that becomes the metrics. But it need not be right. However if you convince your audience, it gets general acceptance.

    What is being measured? Keywords? Clickthrough rates? Maybe that's the wrong metrics for some things and the right one for others. But what about the brand imagery and affiliations created with the ad? That cannot be measured.

What according to you is social media's biggest contribution to marketing?

There are lots of contributions and lots of dangers. One contribution that has not been fully realised is the potential of co-creation. Where businesses use customer inputs through social media to figure out what they should make. Understand their pain points, use feedback and then develop products and services. It was hard to do earlier. Even if you could do it there was not much infrastructure to support the efforts offline. But now manufacturing capabilities have improved and there can be more customisation.

Preethi Chamikutty ET130109