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Pitch CMO Summit 2018: Five takeaways for every marketer, according to Raymond CEO

20-March-2018
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Pitch CMO Summit 2018: Five takeaways for every marketer, according to Raymond CEO

At the recently held Pitch CMO Summit, the flagship property of the e4m Group, Sanjay Behl, CEO, Raymond, led an insightful talk on ‘Building brands in an Era of Disruption.’ There were flashback moments as Behl recalled business strategies of yesteryear popular brands like Nokia, Kodak and Blockbuster, which went into bankruptcy owing to disruptive brands and technology like Netflix and Apple.

In this unpredictable marketing world where disruption happens to be the key word we look at the takeaways which can come handy to brand marketers and CMOs:

1. Needs are met, wants are being created by brands and marketers

Behl said, “Look at the options being created within wants.” He touched upon yoga as a category which had limited options a few years back. Today it has exploded into thousands of formats from ‘good morning yoga,’ ‘good evening yoga,’ ‘yoga for toddlers’ to ‘yoga for dogs’ after yoga became a big brand. Behl explained, “Suddenly people found huge economic reason with technology access to the world.”

Behl pointed out that the whole 20th century marketing paradigm was about meeting unmet needs. There was an era in late 80s where the industry almost got into a post-consumerism kind of phase. The options in each of those need categories dramatically increased. Behl gave few examples, stating, “In the textile industry in 15-20 years the number of options mostly 10 controlling about 80-90 per cent of the market now control less than 10 per cent today.

The number of options has gone from 10 to 1000. There are 800-1000 options even in small organised retail of shampoos today. There has to be an absolutely remarkable product standing out. So today is the era of absolutely remarkable products.” The CEO pointed out that little effort is required from customer’s end to pick up the product. “That’s the challenge most of the marketers are facing today.” Behl advised that today one needs to make money at early adopter stage as middle-of-the-belly is the most unprofitable phase in the marketing paradigm.

2. Brand equity, reputation and IP no longer guarantee existence of brands today

Behl observed that anything that has been leader for decades is extinct today and anything that was born yesterday is becoming a leader today. None of the factors which earlier provided sustainable competitive advantage to the brand like age, size, reputation, current sales, brand equity and IP in any combination guarantees a brand's existence today.

Here Behl posed an introspective question, “How do you build brands when brand equity itself is not a guarantee?” Sony disrupted the 2-in-1 market and got itself disrupted by digital music. Apple has been having a great ride for 10 years. The CEO asked whether that guarantees its existence in the next 10 years. “Maybe. Maybe not. In 2025 you will see an Apple equivalent emerging."

3. An idea can be a billion dollar in no time

Earlier it would take as long as 20 years to build a billion dollar company. Raymond itself took 93 years to get a billion dollar valuation. Now it takes as less as four weeks (which was in the case of Pokemon Go). Behl shared, “It did $4 billion in four weeks. Similarly Oculus founders collected $2 million. In 2015 he sells his company for $2 billion to Facebook through crowd sourcing.” Simiarly YouTube and Instagram took two-to-five years. He pointed out that companies are short lived. “If you don’t get the whole business mix right you are losing out. “

4. Every single brand will go through infusion of technology and eventually 6Ds

According to Behl these 6Ds are digitization, deceptive, disruption, dematerialize, demonetize and democratise. He said, “It’s bound to happen in every industry. Initially it looks very deceptive. Eventually few of these technologies become disruptive.” He gave the example of digital photography which was invented in 1975 and was deceptive till '95. From ‘97-2000 it became disruptive.

Finally in 2011 the global leader went bankrupt. He went on to explain, “First thing it does is that it dematerializes everything. Distribution is dematerialized today. There is no need of a physical store to sell my product. Clothing will become demateralised at some point in time. Once that happens the marginal cost of creating that product is almost run down. Physicality of the cost comes down then it democratizes. This is the curve every single brand is bound to go through at different times.”

Among the industries, hotel, travel, and telecom have gone or are presently going through this phenomenon. Behl explained, “What we have seen till now is only 1 per cent. It will go up to 99 per cent in the next 10 years. There are 40 billion cameras in the planet which will go up to 400 billion in next 10 years. 99 per cent of disruption is ahead of us. Internet is the true global ecosystem.” There is going to be an abundance of everything, clearly.

5. Disrupt yourself before someone else does it

Behl had a clear policy over here to beat the competition. He explained, “Put your business value chain into 6Ds. Every single note of your value chain must go through this filter to find out what could be digitized. This is because anything in your value chain that can be digitized is getting digitized. It’s better that you digitize it. Because very soon deceptive will become disruptive and disruptive will demonetize and the thing will go away.” Behl also advised not to mix new ideas with the core business.
See full address below:

Tags Pitch CMO Summit Raymond Sanjay Behl

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