Madison World’s Sam Balsara in conversation with Tata Sons’ Dr. Mukund Rajan
At the inaugural Media Ace Awards by exchange4media Group, the session between Dr. Mukund Rajan, Brand Custodian and Member – Group Executive Council, Tata Sons and Sam Balsara, Chairman, Madison World opened up a wide discussion on how to make a brand eminent internationally. Balsara started with saying that despite Tata’s eminent position in the world, little is known about it at least in the marketing and media circles. Referring to a slide on Tata’s high growth from 2005 to 2015 which had a six fold increase he said that he had never thought of Tata being so aggressive in its growth. What did the group do to make this happen? Dr Rajan said that there was a systems management since the 1990s which helped in the benchmarking of the company in comparison with the world. This he said helped us to compete with the world and this was implemented very well in the company so that we could compete on international standards.
Balsara next asked, “How do you maintain yourself on this glistening growth of Tata?” Rajan responded “That is the biggest challenge we have, to maintain that state of growth. I believe we have the capability, talent and the managerial acumen and because we have become global already and we don’t think it is a problem for us to take it to the next level. I think there will be great opportunities in acquisitions but I think there is plenty of opportunity in some of our principle businesses. I think we are already at a significant scale. It is easier at this stage to go to the next level. It is harder when you are a very small enterprise and you have large ambitions,” he said.
Balsara further spoke on the brand being reputed in India but said that many Indian brands in international markets are not that reputed. He further asked as to what is the problem and what can the government do to change this. Rajan said that a lot has changed in the span of 20 years. He said that earlier big companies were looked down upon when they made large profits and the society was more socialist in nature. Now however profit making is not an issue. Ecommerce players that come up with good ideas are making loads of money. A lot of things have changed and India will have its time he said. Though there are government agencies to clip the wings of many companies, there are a lot of things that are changing now. There is greater freedom from government, state or central, is coming he said. He said we can already see it as States are competing against each other. For corporates he sent the message that you have to have quality in anything that you offer and for that you need to spend on research and development (R&D). To this he added that Indian companies spend less than 1% on R&D. Even he said we (Tata) spend not more than 2% on R&D. While international companies spend about 6% on R&D. Also he believes that the company should become a local in the market that it is serving.
In terms of the media and marketing space Balsara questioned Rajan on whether they are using all the levers of marketing? To this Rajan admitted that they are a little low in marketing their products. However he said, “Our CSR activities have helped us in strengthening our company”. He further said, “We came to know our wage costs are low, this is because the employees trust in us and that reduces the need to advertise. Having said that we need to be more visible.” There are companies of Tata which advertise but don’t carry our brand name. He further said that we need to spend more significantly in advertising their brand globally so that in international markets it is known as it is in India.
Our typical marketing budget is usually 10 per cent of the topline spend