Nitin Paranjpe, CEO and MD of the country’s largest FMCG major Hindustan Unilever Limited, is a bring-it-on man. On the sidelines of the exchange4media Conclave 2011 presented by Jagran, where Paranjpe was the keynote speaker, he talked about the rapidly changing outlook of the Indian consumer, the pivotal role digital media will play in future, how adaptation is the way ahead and HUL’s expectations from media partners. Here are excerpts from an exclusive one-onone with Anurag Batra, chairman and editor-inchief, exchange4media group.
HUL BASKET
Kwality Wall’s ice cream, Knorr soups & meal-makers, Lifebuoy, Lux, Pears, Breeze, Liril, Rexona, Hamam and Moti soaps, Pureit water purifier, Lipton tea, Brooke Bond (3 Roses, Taj Mahal, Taaza, Red Label) tea, Bru coffee, Pepsodent and Close Up toothpaste and brushes, and Surf, Rin and Wheel laundry detergents, Kissan squashes and jams, Annapurna salt and atta, Pond’s talcs and creams, Vaseline lotions, Fair and Lovely creams, Lakmé beauty products, Clear, Clinic Plus, Clinic All Clear, Sunsilk and Dove shampoos, Vim dishwash, Ala bleach, Domex disinfectant, Modern Bread, Axe deosprays and Comfort fabric softeners.
You were in Nepal recently for a market visit, and asked some consumers to recall the last three or five HUL advertisements that they had seen, and they could not remember any. On being pressed, they mentioned the Lux ad in which Sridevi was featured. You observed that consumers see a lot but remember little or nothing. If this is the case, then what do you expect from your agency communication partners? Is it worrisome from the advertising spending standpoint?
If this is not scary, then I don’t know what is. It is not the first time that this has happened, but it was even starker in Nepal. They said they watched our advertising. They said they liked it. They claimed they saw it a day before. But when I asked them to recall the ad that they saw, they drew a blank. When I pushed them to recall any ad in the last 3-4 months from any product category, they struggled for an answer. When I asked them to describe at least one that they remember, some of them talked about the Lux ad with Sridevi in it. I don’t know when we ran that ad. However, it was not all bad as they did get some ads right. But generally, it was a cause for great concern. It is right that consumers see a lot but remember nothing.
When I asked myself why this was happening, I realised it was simply because we were ceasing to be relevant. We were ceasing to say something to them that they wished to remember and something that made a difference to their lives. Some of it is also because over a period of time, a little bit of cynicism has crept into how consumers are decoding advertising. Credibility of conventional advertising is going down and consumers are becoming smart enough to realize that these are manufacturer-driven messages and consequently this is the outcome that we see. Unless we understand what this consumer insight is and are able to present our communication in a manner which touches a chord and engages and entertains them in doing so, we are not going to be heard.
What surprised you recently was that in a 2,000-population village close to Lucknow, the aspiration of consumers is such that a woman uses Lux to bathe but for her face she uses facewash. If that is what is happening, do you think the agencies of today are equipped to connect with those consumers in rural markets? Do marketers understand that?
We are going to see some fabulous opportunities ahead of us and I will talk about two of those opportunities and what it means for us. The first opportunity is the one that you referred to… in a village about 70km from Lucknow, when the consumer was asked about the soap she used, she replied Lux for the body and a facewash for the face! I could not believe what I was hearing. This was an experience my colleague Gopal Vittal (Executive Director, home and personal care, HUL) experienced when he went there. We all go out to markets, to small villages to stay in touch with the real India because the reality is that the change is happening so rapidly around us that we could be stuck in time with some assumptions of what rural India is, of people living there and the rural consumption graph, and lose track completely. This was one such example. The second example is of the time when I went to a village of about 1,500 people in Tamil Nadu. There was a lady who I was speaking to with the help of an interpreter. That is when I spotted a sachet and got a sinking feeling in the pit of my stomach that something horribly wrong was going on. It was a sachet of Comfort fabric conditioner. I asked her, “Do you know what this is?” and she looked at me quizzically and said, “That’s a Comfort sachet.” I thought she probably bought it thinking it was a shampoo sachet, used it like shampoo and got deeply dissatisfied with the experience. I asked her what she used it for, and she told me it was for her clothes when she washed them, like it was supposed to be used. She added that she used it to make her clothes smell flowery. This is my personal experience. I would never have believed it, had someone else told me about it. I know I would have been guilty of restricting this product to metros, maybe extend it to Tier-I towns through restricted distribution.
That is my notion of India and Indians. It tells us how rapidly consumers are changing and I keep saying that there is a huge role that the media has played in all of this. I believe that the tipping point has come just now because almost everyone who is getting into the consuming class today are people who have been brought up after 1980. In the ‘80s, we saw a fundamental phenomenon, which is the advent of mass television and mass advertising. Therefore, there is a generation which is now coming into the consuming class that has not seen the India of yesterday, not seen shortages and lack of choice. With television advertising beamed into homes, aspirations grow. You could be rich or poor, but you see the same advertisements. Therefore, aspirations rapidly became homogenous. People’s means, however, have remained heterogeneous in India. That is the challenge for all of us. That’s why I see a tremendous opportunity and consumption starting to drive us as more and more people show a deep desire to fulfil their aspirations.
You said that we look at containers of the future through the slime of the past. You also talked about certain classification your company uses to match consumers. How do you see this classification in predicting consumption patterns?
The first thing that I and the company have begun to realise is that we had a way of looking at consumers. In the past, we looked at only socio-economic indicators and found that they were not adequate to fully explain consumer behaviour as we saw it. This is when we moved to new methodology called the Living Standard Measure (LSM). This was simply a way to look at a combination of things like income, education, etc, and also look at real buying behaviours in different categories to predict how a particular consumer will behave. So, we classified consumers, assuming that an LSM measure-3 consumer would behave similarly anywhere in the world. But what is becoming more evident is a new dimension of youth that falls in the LSM-3 starting to behave in many ways like an LSM-6 consumer. And that attitude will now force us to rethink LSMs in a manner in which we have not thought in the past. That is a very important observation. The youth in India will drive change in a manner we have not seen before.
According to you, everything will go digital much sooner than we expect. We are currently at 4 per cent of all adspends being spent on digital. When do you think we will get to 10-15 per cent? It is important when you, a thought leader heading a company that is a trendsetter and more-or-less determines industry dynamics, talk about going digital. However, your brand managers and category heads are not putting money in digital…
Firstly, I don’t know when digital will get to 10-15 per cent of the whole adspend. I also have no idea of the future unfolding the way I talked about. I just painted a scenario and spoke about possibilities of that scenario coming true. The big question is whether or not we are ready and geared up for it. Secondly, I completely agree with not putting enough money in digital as a marketing category. But why my brand manager? I myself am guilty of trying to extrapolate the future based on the recent past. It is a big challenge and I remind myself time and again that maybe we are not being bold enough in the way we are foreseeing the future. We all can be caught napping if the change comes faster than we anticipate. But I have no clue about whether it will be as fast or not. We keep saying that we will keep doubling or tripling our spends every year on digital. If you ask me whether it is good enough, I don’t know. We just have to wait and watch.
Communication partners in some way dovetail into a company’s thinking. I was reading Group M CEO Vikram Sakhuja’s interview on exchange4media.com three weeks ago wherein he said that an area in which he would like to grow is digital by putting more money in and having more insights about the category. However, the advertising in India is very timid. It is not reaching big ideas. They are very incremental. Is this a cultural thing in this country?
I don’t think it is cultural. There have been cases where people have been bold. But one cannot deny that good ideas are not easy to get. They are simple in hindsight. I think we should all challenge ourselves to find some of those ideas.
Talking about good ideas, there is one idea Unilever is leveraging in the UK and that is crowd-sourcing. It is about finding those ideas from the wisdom of crowds and consumers. However, in India, HUL is not doing much crowdsourcing. Is it something HUL will be turning to in a big way?
We are doing some of it. In the ice-creams category, Cornetto Luv Reels carried out possibly the largest crowd sourcing and digital talent hunt. We identified a large number of people and we received around two lakh entries. The winner had the promise of working in a movie produced by Kunal Kohli. The movie is under way and will be out in September. With Surf Excel, we carried out a similar piece of work. It is going on. Do we need to do more? I will be the first one to say that there needs to be more experimentation and more effort and that is how we will become comfortable. But who am I to point a finger at anyone else? The reality is that the leaders of companies who are in the position to take decisions regarding this space are often not comfortable with this technology and thus are reluctant to experiment.
I, for example, would not be comfortable with many of the things that are going on in terms of marketing. One of the things that I plan to do this year is to have reverse-mentoring, where I will have a 25-year-old trainee from the company be my formal mentor and guide me as far as the digital space is concerned. I would subject myself to projects, reports and reviews just as is done with trainees. Because if my leadership team and I don’t become comfortable about this, how can we take a call for the company? That is the real challenge. The reason why we are not moving fast enough is that leaders do not have as much of a feel for this. People get to positions of authority because they have a sound understanding of the business drivers and a feel for it. What is happening is that the drivers of communication are undergoing a change. Our experience of communication has become irrelevant.
What are your expectations in terms of media solutions or creatives from all the media agencies that HUL works with?
The honest answer is that our media partners and we are on the same page in terms of recognising the scent of change. All of us are facing challenges. Within the organization, we face the challenge of equipping ourselves to deal with new realities. Our media partners face a similar challenge of rescaling themselves to address the new realities that we are confronted with. There is a challenge on both sides. Is there a difference of opinion on the direction of change? Not at all. I think now the task for us is to come together to make this transition as we move forward. While the way we communicate is undergoing a change, the need for communication and the role of communication in terms of shaping attitude and shaping behaviour has remained completely unchanged. I would like our communication partners in those cases to push the envelope, be bold enough to challenge us and get us in the same space as well so that we are able to get great advertising that builds brands, builds businesses and makes a difference in the lives of consumers.
Are you going to improve the remuneration of your communication partners so that better quality people come into the agencies?
I am not the best person to answer that. We believe that we need to have a relationship with our partners – be it our advertising agency or other media partners, based on a win-win relationship. It should be based on the presumption that both sides are in to make reasonable amount of money. It would be shortsighted and foolish of us to think that we can get away with terms of trade which are not sustainable in the long run. If there are issues, then we can sit across the table and deal with it.
However, I would not put in money only for additional inputs – our partners must be willing to show tangible results. The key factor on both sides is accountability.
Feedback: abatra@exchange4media.com
