Megamarketing: Cracking closed and protected markets

Vivek Darji | May 30,2014 11:02 am IST

The year 1978. Coca-Cola withdrew from the Indian market opposing the policies of the Indian government.

Tried to reenter. But thud !! A huge barrier stuck, by the name of "government" protecting the Indian market. Guess who else was waiting in line to enter the lucrative Indian market. No bet for guessing, Pepsi-cola !! With completely different route christened as 'political marketing', PepsiCo formed a joint venture with an Indian group to seek the government's approval. To add thrust to real-politicking the government it offered to help India export its agro-based products in a volume that would more that cover the cost of importing its soft drink concentrate. PepsiCo promised to focus selling efforts on the rural and the urban markets and offered to bring in new food processing, packaging and water-treatment technology to India. Too much to woo government and unions !! Finally it outwitted Coca-Cola by entering India ahead of the Cola giant.

Early 80s. The case of ingenious Japanese Consumer Durable companies that entered India. A carefully crafted step-wise approach to play in the Indian Market with their televisions, VCRs and stereos. Sony, Panasonic and Toshiba started with advertising their brands in Indian newspapers and magazines. Next step was to test-market the brands; a few Japanese products started entering in India unofficially. The brands showed tremendous success. The challenge now posed was how to enter India officially, since India was more concerned about protecting its foreign hard currency and its fledging home consumer durable industry. Japanese government served as fraternizer by lobbying the Indian government for realization of the ban. In return, Japan offered to buy more indian goods and services. And voila !! the market was successfully cracked.

The reason to quote these examples is to show how extensive the scope of marketing can be !! How different it is from normal classroom marketing lessons !! Marketing is not only about sitting in class and learning use of 4Ps !! Its all about thinking creatively, thinking differently, thinking out of the box and thinking something 'beyond marketing'.

These two examples illustrate the canny use of 6Ps of marketing. Hey wait, you heard about 4Ps of marketing, right. What do remaining two Ps stand for ??

In above case they stand for Power and Public Relations. PepsiCo and the Japanese brands used a carefully coordinated approach of application of the economic, psychological, political and PR skills to expand their market in well-protected India. In management parlance this strategic approach is christened as 'megamarketing'.

Power is what signifies the controlling factors in the economy. It consists of understanding the political structure of the economy, key decision-makers and the ways and the means to keep them in control. Public Relations is more about understanding and convincing people about the company's products and brands. The power aims at push strategy whereas public relations, though takes longer time to develop, represents a pull strategy which benefits company in long term.

There are numerous examples to illustrate the advantages of megamarketing approach. The procedure adopted by the companies (& sometimes nations) in using megamarketing essentially consists of three steps:

1. Identification of power structure: In case of India, the key decision-makers were politicians, bureaucrats and the employee unions.

2. Strategizing on persuasion plan: Again persuasion plan can be strategized in three different manner: Neutralize the opponents - Pepsi's approach of offering more in return to licensing and imports; organize scattered allies (customers) into a coalition; Turn neutral group into allies - the Japanese approach.

3. Develop a tactical implementation plan on who does what and when and how to persuade them. And finally get on the megamarketing bandwagon and use rewards, coercion and/or expertise to crack the market successfully.

Apart from use of two more Ps in marketing approach megamarketing differs from normal marketing on few other grounds. The principle objective of megamarketing is to gain market access whereas normal marketing is concerned more about finding out optimized mix of product, distribution and communication in given market. The number of parties involved in megamarketing is higher. Apart from regular trade parties, suppliers and distributors, the focus is on bureaucrats, government, and labour unions among others. This is one of the reasons for longer time frames and higher costs involved in this approach.

Inspite of all the encumbrances that exists in megamarketing approach more and more companies take up this approach. The fruits, of the costs involved, are more rewarding. These are what Suzuki tested by entering India forming joint venture with MUL. After 13 long years of liberalization, Maruti Suzuki continues to enjoy a healthy market share in the Indian automobile sector.



Vivek Darji is working as Consultant (Technology and Enterprise Applications) in Deloitte Consulting and previously worked in High Tech Rochester, ICICI Bank and others big organisations. He did education from University of Rochester - William E. Simon Graduate School of Business Administration, NMIMS Mumbai and Gujr...