Einstein once said, ?Before God we are equally foolish, equally wise.? Replace the word God with consumers and it pretty much sums up the overriding truth in the world of marketing for 2009. After the great financial meltdown, all consumer pundits talked about a year of consumer caution. Some even went ahead and predicted a year of doom and gloom for the consumer marketing industry. But the consumer was ready to prove them wrong.
In a year where so-called consumer confidence was at its lowest, all consumer good segments registered growth. High-end durables went through the roof?the rough estimate is a growth rate of about 25%. Automobiles never had a better year, housing market did not need a correction to its emotional pricing and even good old FMCG companies registered growth in volume and value. Good news all around. But before we raise a toast, let?s try to understand this phenomenon. I think we somehow underestimate the psychological power of consumerism.
People, after getting used to a certain lifestyle, will not renounce it in a hurry. Consumer confidence measures are at best an indicator of a cautious mindset?they are no great predictor of behaviour. Even when the economic outlook isn?t great, consumers will be reluctant to either downgrade or compromise living standards.
Indians have learnt to enjoy life as a consumable product only over the last decade. Before that, life was a karmic condition?a set of motions and milestones one must go through. A year of Wall Street stupidity wouldn?t have changed this outlook. This journey (loosely called consumerism) has the power to become self-sustaining because of its fatal attraction. Economic outlook will be a small force in front of this newfound freedom. Consumers have proved this in 2009 and will continue to prove it. Marketing pundits may ignore this fundamental truth at their own peril.
Let?s pick up a sector that hasn?t done too well?financial services. Careful analysis will show that it?s the liability side of the business that was shunned by the consumer. The asset business never had a lack of consumer interest (it had other issues like liquidity and financial institutes? over-caution). Again, going back to the fundamentals of consumerism, liability products were artificially sold as ?consumer goods? where asset products are the true carriers of consumerism. A loan is an invitation to consume life as a exciting product. A mutual fund is essentially a reminder of the pre-liberal mindset?it?s about duty, roles and fulfilling filial responsibilities. In a year when economic outlook is down, consumers will possibly not like to get bogged down with duties and responsibilities. But his quest for a living standard will continue. In the yesteryears, we actually feared the possibility of giving in to our desire. So given half a chance, we would move into our comfort zone of restraint. Today, we have given in to our desire to derive maximum pleasure and enjoyment out of our lives. This is one-way traffic. It?s not easy to do an about turn.
Anything that?s helping the Indian consumer consume life has witnessed growth?the number of domestic passengers grew by 25%, October 2009 recorded a total of 17 million new mobile subscribers, the media and entertainment industry witnessed unprecedented growth. The power of consumerism is real, palpable and undeniable. Even during a so-called slowdown. The marketers may have panicked a little more than the consumers. The mindless price war in telecom may have left the marketers wounded?the consumer isn?t complaining.
Talking of marketers brings me to the most important aspect of 2009?the graduation of the marketer to adulthood. Marketing blokes came a lot closer to business realities. They had to closely monitor and manage significant supply chain volatilities. A welcome departure from their world of mood boards, radio jingles, focus groups and product windows. 2009 may well be remembered for marketing?s return to the centre of the commercial ecosystem.
As for 2010, a few fundamental themes will continue to dominate the world of consumer marketing. The Indian journey from life as a karmic condition to life as a consumable product will continue and achieve greater momentum because the media will fuel it by peppering our lives with the great economic recovery stories. So, growth in consumerism is a given. But the dominant sub-theme of 2010 onwards may be individuation.
Individuation is the process by which social individuals become differentiated from one another. Indians are going through the phase of personal construction of identity. Talent is an antidote to our social background. We no longer define ourselves by where we are coming from but by where we are going. Products and services that advance this sense will dominate market growth. Cell phones not as communication tools but as identity builders, products that not only help you climb the consumption hierarchy but help you build individuality and opinion.
Marketing will have to deal with this new creature called the mass individual. The business reality will never allow product categories to address the user as an individual but his/her latent consumption desire will be driven by the need of individuation. This may need a lot more imagination and innovation and learning from fields like design and entertainment. Maybe 2010 will mark the next big inflection point?integrating principles of design, content building and other mass imaginations into the principles of marketing. This will possibly make the marketers a stronger and more formidable lot.
?The author is managing partner, BBH India