The New Churn In The Marketplace

Updated: Aug 27 2004, 05:39am hrs
Advertising and marketing is once again going through a huge churn. Driven by bottomline imperatives of companies, they are squeezing ad agencies to new remuneration systems. Many multinationals across the world are restructuring themselves which in turn is affecting the way regional and subsidiary markets are being governed. Indian homegrown companies are rediscovering new markets and competitive strengths.

Many fast moving consumer goods (FMCG) companies in particular are being pushed to the wall and are finding that old ways of mass marketing alone will not work any more. The new reach that television is throwing up also comes with its own challenges of the need to have both regional as well as national marketing strategies. In many ways, companies are grappling with the new paradoxes of marketing. And only those that can manage these will survive. What are these challenges And how are companies overcoming these

Global and Local: In the late nineties, Professor C K Prahalad of Michigan University wrote a seminal piece on multinational corporations strategy for emerging markets titled The End Of Corporate Imperalism. Here, he argued that MNCs often adopted an imperialistic attitude where they tried to supplant global strategies in emerging markets and it was only those who were able to adopt local strategies will succeeed.

The last few years saw precisely such a movement in MNC gameplan. But in recent months, driven by global restructuring and the growing re-emergence of regional headquarters as opposed to country operations, a number of multinationals are again, for example, focusing on pure global brand introductions. How will MNCs manage this transition

Creativity Vs Data-focused advertising: The squeeze in many advertising agencies brought about by new fee-based system of remuneration and drooping agency margins has taken a toll, for example, on the quality of talent in many agencies.

At the recent CII marketing summit, O&M group president Piyush Pandey rued this fact. On the other hand, the need for deliverability and accountability in corporates have also seen many corporates pushing for advertising based on research and quantifiable results. What is the choice before CEOs today in such situations The ability to manage both ends of the spectrum may become the need of the hour.

National and regional: In the past few years, a number of regional brands and companies have aspired successfully to become larger and national brands. But at the same time, national and multinational companies are also finding that the advent of television and reach into the furthest corners of the country is bringing to the fore the need for regional and local marketing treatment by national brands and companies.

This is a paradox that many companies are grappling with. It also throws the key question as to how effective mass marketing will be. And, when these local challenges are combined with the international marketing templates that some of the MNCs now have to follow, the task becomes doubly daunting for them.

Clearly, there are no easy answers as many companies are finding. But all of them are finding that they will have to address them sooner than later.