He visits India twice a year--this whirlwind trip included the keynote address at the Symbiosis Institute of Business Management's national marketing conference on Saturday, an address to the Ahmedabad Management Association on Monday, and a seminar at the Tata Management Training Centre on Tuesday--besides consulting with international (AT&T, Whirlpool, Philips) and national (he is on the board of Wipro) companies. In an exclusive interview with The Financial Express between high-powered addresses, Sheth addresses the new power tools for marketing:

Onrelationship marketing:
It has become a new paradigm of business marketing practise. Given enormous competition, the only thing you can latch on to is your customer. Thus acquisition is not enough; you've got to retain your customers.

In business-to-business marketing, (to practise relationship marketing) you need not only relationship managers but also business processors (supply chain management, processes of payment and computerisation) and infrastructure. In business-to-consumer marketing in India, relationship marketing is done through people rather than databases. This sort of relationship marketing is going to be more prevalent in network marketing.

On the future trends:
The next phase is customer-centric marketing not segmentation, which has been in vogue since the last 30-40 years. Here, each customer is a market. In most cases, customer revenues are concentrated in a 80:20 ratio--20 per cent of your account will have 80 per cent of revenues. Profitability is even moreconcentrated in a 10:90 ratio--only 10 per cent of your customers are profitable and 90 per cent non-profitable.

So the next trend in relationship marketing is outsourcing customers. Customers that are not going to be profitable are going to be given to someone else--in a positive way and not by abandoning them. Just as companies outsource internally--go outside for IT services orcreate ads.

On the theory of marketing:
The four Ps of marketing were organised around the resources of a company-- Product, Price, Promotion and Place. From the customer's viewpoint, the four As--Acceptability, Affordability, Availability and Awareness of the product and service--mean what are these resources going to do for him. So the real excitement is how are you are going to convert the four Ps into the four As.

On marketing on the Net:
With government encouragement, the use of the Internet is bound to grow, especially in the business-to-business market. In the long run, the electronic way of doingbusiness will capture only 20-25 per cent of total distribution. So it's really bricks--but not the mortar. More and more companies are adopting this hybrid of bricks and clicks. The physical and virtual value chain will start more as complimentary.

Despite infrastructure constraints, India is learning e-commerce marketing as fast as any other country. We are not laggards here. There will be a lot of innovation to create brands on the Net. On the Net, a brand becomes a symbol for remote trust. In the case of Wipro's branding, we've uniquely linked a company in high-tech with the soft touch of a sunflower. The way we name a company is also going to be important, for example, Infosys.

E-commerce is one field where India can come up with its own knowledge base. Traditionally we've been good at design and creativity--attributes which are so critical in this Internet era.

On the new distribution order:
The real growth is not in the top 100 cities but in the rural markets, which is driving thegrowth of products like TV, appliances and packaged shampoos. This rural growth is going to change the distribution system enormously. Our distribution system is very inefficient with many levels between the producer and consumer. These tiers will collapse leading to a one-step distribution where the wholesellers and the retailing functions will be combined.

The traditional role of wholesellers were financing and warehousing; now financing may not be as critical as the economy grows. Financing the middlemen like the retailers is also going to be less and less critical.The retail structure itself will become more like a super retailing structure. National chains will emerge in India as in Germany and UK where every city has a particular brand name of a retailer.