exchange4media held the annual PITCH CMO Summit yesterday in Mumbai. The event was attended by marketing and brand heads from across various industry sectors. Among the sessions was a panel discussion on the opportunities in tier 2 and 3 markets for brands and how these can be leveraged by thinking tangentially. The discussion was moderated by Subhrangshu Neogi, Director (marketing) of Religare and the panelists included Sujit Ganguly, Senior GM and Head (Brand And Corporate Communications) of ICICI Bank, Rishi Piparaiya, Director (Marketing & Sales) Aviva Life Insurance, Mohit Ganju, Marketing Head, IndusInd Bank, Anup Mathew, VP & National Head, DB Connect and Nitish Tipnis, Director (marketing & Sales) Of Hover Automotive India.
Starting off the discussions, Neogi stated that the major opportunity lies in tier 2,3 and 4 cities which include more than 700 cities and make up 50-60 per cent of the consumer population. He asked the panel whether marketers were doing enough to target this chunk of the population and where the opportunities to innovate resided. He also suggested that it was not fair to paint the entire tier II and III population with the same brush.
"Tier II and III are growing rapidly and consumers are changing. They are now exposed to all brands and have become equally demanding. The reason for this is better communication and increase in their income. Any new service, technology or infrastructure we (ICICI bank) bring; we ensure is also made available to tier II and III," said Ganguly.
Dainik Bhaskar has a strong presence in this population and Mathew agreed that for them, Tier II and III constituted the daily bread and butter and was on par with tier I cities. "We cannot treat them any different from metros. There is a great demand and the market is a reality," he said. He also agreed with Ganguly about the impact of e-commerce on making the consumer more aware and reducing the gap between metros and non-metros.
"As marketers, we are used to thinking so laterally. There are tier II, III and IV markets in every city, which is all because of aspiration. Mobile penetration is still less, as compared to TV, if you take into account unique users," said Tipnis. He opined that Indian companies were the best placed to tap the non-metro market as opposed to MNCs since it was in their DNA. "Juggad is something that every marketers must know," he suggested. According to him, "juggad" was not just about innovating in the face of a resource crunch as this is an issue that all companies face; it is about doing things in new ways. "What we need to learn is how to attach a systematic process to it (juggad). This is something we can learn from the west," he further said.
On being asked by the moderator whether he felt that Indian companies were doing enough. Tipnis agreed that they were but it was the MNCs which adopt a one size fits all philosophy.
Piparaiya raised an interesting point. He questioned the need to move to tier II and III cities when there were still a lot of things to explore even in the metros. Speaking about his own sector, he admitted that for a MNC, creating trust in tier II and III cities was a challenge. On being asked by the moderator how they were leveraging Dabur as a partner to reach out to customers in these cities, he agreed that partnerships were pretty much the way forward. "Getting talent is a huge issue in these cities. Shared infrastructure, channels, etc. help and we are constantly exploring these options," he said.
Mathew also opined that a lot of customization is required for tier II and III cities. For many segments, he said, the local players give a real run for the money to the bigger players. He gave jewellery sector as an example to highlight this point.
To round off the discussion, Neogi asked each panelist which were the best practices they were adopting for tier II and III cities. Mani suggested that the best thing to do was to listen to consumers and their needs. He also cautioned against adopting a homogenous philosophy as something that works in one tier II market might not necessarily work in another.. "OOH is a good option in tier II, so is print. We are still scratching the surface when it comes to mobile though it is the way forward. Traditional medium will still drive core marketing," he said.
Ganguly also cautioned against stereotyping customers. According to him, in most cases, the only difference between consumers in different cities is the wallet size. Neogi further asked the panelists what kind of cultural change they had brought in their own organizations to target non-metros. Piparaiya said that it was important to be always prepared and open-minded when ti came to the marketing mix since one never knew where the customer was going to come from.
"Encourage people to make mistakes, Don't penalize them. However, ensure you don't keep repeating mistakes," said Tipnis.
The annual event is organised by Pitch, the marketing magazine of the exchange4media Group and powered by general entertainment channel Colors, the presenting sponsor is Big Magic.