Tag Archives: Marketing

Better before Cheaper

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The last post highlighted an HBR article that mentioned that for companies which wanted to become truly great – to grow and sustain over long periods of time – it was essential to focus on revenues first and costs second. The same article mentions another key factor underlying the greatness of companies: focus on “better before cheaper.”

Better before cheaper means these companies concentrate their energies on coming up with a good product and selling it to their customers much more than they focus on coming up with a cheap product. Yes, there could be market situations where a cheaper product sells much more than a slightly pricier one. But if the price advantage comes at the expense of product quality, then it is unlikely to provide sustained benefits.

One of the classic examples that comes to mind is that of Apple which charges a premium for its products, and, despite this, has cultivated a herd of followers! Had Apple focused on lowering its costs or coming up with cheap products, it would have been just another brand, fading into the background as soon as it came into the limelight.

A possible example for the other extreme could be the Mahindra Stallio where product quality suffered when the company tried to focus on lowering costs. Despite good marketing (see a clutter-breaking TVC here featuring movie actor Aamir Khan) the product had to be withdrawn from the market. Mahindra is, nevertheless, back with a new bike, the Centuro, and it remains to be seen where this product is headed.

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Prepare for the Best

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We are often told to “hope for the best, prepare for the worst,” and the advice seems well-founded. After all, who wouldn’t want to survive through the worst of circumstances?

But preparing for the worst makes your company capable of exactly that – responding perfectly when the worst possible situation comes. The arsenal is all ready for when your most important competitor starts a price war, so is it when your customers don’t adopt your new product. But what if the same competitor shifts focus to a different market segment, or your new product is adopted surprisingly well by the market? Having the options in place to quickly increase production will then allow you to capture the market. At the very least, having a way of noticing such an opportunity will let you take advantage of the next one when it arises.

Sun Tzu says in The Art of War: “Be conscious of possible disadvantages that can arise when you are in a favorable position. Also be prepared for possible advantages that can arise even when you are in the midst of misfortune.”

Where Credibility Stems From

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Credibility – the confidence that is critical when trying to sell your product or service – comes from several sources. For startups, the source might simply be (baseless) confidence in one’s ability to deliver. Later on, having proven results to the company’s name makes it easier to approach other potential leads. And over a period of time, even results become irrelevant if enough customers have bought the same product or service. Once the market reaches a tipping point, herd behavior among customers kicks in if other factors are conducive.

I can easily imagine some of Infosys’s earliest clients buying their IT projects after listening to the bunch of youngsters who sounded like they barely knew what they were doing. Over a period, having done multiple projects and delivered results that were measurable, they would have found it easier to present credentials. Of course, the company is busy setting its own house in order now, but that’s another story.

Showcasing credibility is easier with experience, but the process has to start somewhere. Perhaps square one is not a bad place to begin.

This Too is Guerrilla Marketing!

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What happened at the end of a recent panel discussion on ’empowering adolescent girls’ as part of the annual conference of the Indian Philanthropy Forum can only be termed “guerrilla marketing”, although it might not fit the conventional definition of the term. We were an audience of about 200, three-fourth of this being women, from relevant organisations, business schools, the press and others. Given that the event happened at the Taj at Colaba, Mumbai (you know why you know the Taj), the audience was an appropriately privileged set.

The panel had just finished its discussion and it was time for questions. Suddenly, a lady in the front takes the mike, and says (and I quote verbatim):

“Hello everyone, I am Aparna Piramal Raje.” Oh ok, the name sounds familiar, I think. “I studied at Harvard Business School and I speak up because that’s what they have taught me at Harvard Business School. I am lucky to have been born in the family I was…” She then highlights some very commendable points on empowering women, such as holding “two half shifts” instead of one single shift on the shop floor, in order to enable women employees to balance work with family needs.

All is well and good, and it seems that she would end her words soon and pass the mike. However, we are in for a surprise. APR holds up and waves a newspaper. I cannot decipher the name from where I am sitting, craning my neck. She says, “If you really want to empower women, read a newspaper whose editor is a woman.” The logic isn’t very clear to me, but no explanation is forthcoming. “Both Mint and <another business newspaper> are edited by women.” (She took the name of the other paper, but I no longer remember accurately what I heard.) “Between the two, Mint has more ethics. And so you should all read Mint.”

With that, APR’s monologue is done.

You don’t believe this happened?! I agree, the whole story does sound incredible. The audience did not utter a word. The mike was passed and the next question taken up. While leaving the hall, I noticed that on a table beside the exit were placed a pile of free copies of Mint. Mint does not figure among the “key supporters” of the conference as listed on the Forum’s website.

I later found online that APR is a columnist for Mint, and dare I say, a very loyal one too.

Now what do you think of this?! Here was a “guerrilla” who struck audaciously to “market” her product. Was it right? If it was not right, was it wrong? Why even bother? Right or wrong, it’s an interesting world!