How do you build a brand among the uncertainties and opportunities of a developing market? Sunil Gupta, a professor at Harvard Business School, shares the lessons of Ranjan Kapur, an icon of the Indian advertising industry.
by Sean Silverthorne
One day in 1966, when Ranjan Kapur was walking through Midtown Manhattan, a black limousine arrived. David Ogilvy, the founder of the agency in which Kapur was hired recently, is a man he immediately recognized as an advertising icon. The two men started a one-hour discussion in the city.
The young Kapur came after a short stay at Citibank to Ogilvy & Mather, where he decided that he needed a more creative career. His conversation with Ogilvy confirmed that he had made the right decision.
“THE INDIAN CULTURE IS ALWAYS FASCINATED BY THE OLD TYPE OF BRITISH OPERATION, AND THE ADVERTISING WAS SEEN AS A FANTASTIC THING”
Kapur discusses his time as Development Advisor and President of O & M India in a recent interview with Sunil Gupta, Edward W. Carter’s Professor of Administration and Chairman of the Harvard Business School’s General Management Program.
During the discussion, which took place last August in Mumbai, Kapur reflected 50 years of experience in the advertising industry, in the era of the digital revolution and his retirement in 2003. is now active in the care of young entrepreneurs, businesses and painting.
Ranjan KapurThe interview is part of the Creating Emerging Markets series sponsored by the HBS Business History Initiative, where business leaders from Africa, Asia and Latin America talk about their growing experience over the past decades.
Sean Silverthorne, Editor-in-Chief of Working Knowledge, asked Gupta about her experiences with the Kapur interview.
Sean Silverthorne: Kapur has a great passion for advertising. What is the advertisement he loves so much?
Sunil Gupta: Advertising is an activity of the right brain, the art of creating something from scratch. In addition, advertising is about understanding and communicating with people. He seems to be a person, someone who likes to tell stories and not play numbers. For some people, the numbers speak, but I do not think the numbers speak to him.
I am very grateful to him that he recognized this very early. In the 1960s, an offer from Citibank was like a gold ticket in India. People would not leave this job and I’m sure his parents were very angry when he did.
Question: You have a fascinating exchange in which Kapur tells you what it means to work in an Indian advertising bureau that still bore the mark of the British Raj in the 1960s and beyond. He says, “If you spoke English with a slight” ho-ho “accent, you were better in the advertising industry and you made progress in the advertising industry … it worked for everyone, we all had a slight accent back then.
A: India gained independence in 1947, and even in the 1960s, the country was heavily influenced by the British Raj. I learned in an interview that the people who recruited the advertising industry in India in the 1960s were all Anglophone and Anglophone graduates of St. Stephen’s College and other elite schools in India They looked more like British schools than Prince Harry. ,
It was surprising to me that India is so diverse and has spoken so many languages that advertising is a people-oriented and communication-oriented activity. I think it was a remnant of British Raj. The Indian culture was still very fascinated by the old British way of life. And advertising was considered a glamorous thing. They were dealing with multinational companies from the United Kingdom and the United States, so it was more of an elitist culture.
Q: What was the business environment for entrepreneurs in India during this time?
A: In the 1970s and 1980s, the Indian economy was reduced. Until the inauguration of Rajiv Gandhi in 1984, many constraints impacted on business growth. Previously, many multinational corporations – Coca Cola and Pepsi – had decided to leave the city because the government wanted to give them a majority stake in their partners. As a result, Indian companies, especially the advertising agencies, have had difficult times as their major customers have decided to leave the country.
“THE FIRST QUESTION THAT HFS FACILITIES HAVE BEEN EFFECTED IF WE MAKE AN INDIVIDUAL EDUCATION PROGRAM IN CHINA AND OTHER FIELDS” How to Build a Brand? “”
In addition, the then government had a socialist bias. Advertising and marketing were not considered good things. There were so many poor people in the country who could not even put a meal on their table and they tried to sell Coca-Cola or buy fancy goods that were not really necessary. So there was a lot of discussion in the country, especially with the politicians, to find out if we really needed it. And lately, when Pepsi came back, a lot of people were saying, “Silicon chips, yes, chips, no.
Question: When will India become more of a business-friendly country, especially for advertising?
A: That changed with the opening up of the economy in the 90s. All of these global companies came back, which helped the advertising industry. And the economy has grown, which has led to rapid growth of the middle class. The Indian middle class is huge; They speak of 400 million people. As the middle class grew with a substantial disposable income and these foreign brands returned, this prompted local brands to improve their quality and services. Competition has increased and consumers have benefited.
Q: Ranjan Kapur is again at the forefront of O & M’s activities in India. He worked in the very successful office in Singapore, but O & M India, based in Mumbai, did not have the same success. He was fourth in the world and fifth. In a short time he has integrated it into the best agency in the country. What has he done?
A: He looked at three important things. At first his company contained the myth: “We are not big, but we are very creative.” In a way, being large and creative meant that it was a long way off. He questioned this hypothesis. Why can not big companies be creative? It was the first state of mind he changed. It takes longer than you can imagine because of the existing culture.
The second thing was authorization. Every hiring decision (in the country) was made by headquarters. It does not make sense if you grow so fast. He has learned that you can strengthen people in Singapore.
The third thing was the balance he created. He spoke of the three-legged chair. Kapur was one leg, the finance director the second, the creative director the third; Everyone had the same agency. They give creative people enough energy to experiment. But there is also the commercial side of the operation, which ensures that customers get what they want. It’s not great when YouTubers win prizes, but customers do not get the business results they want. So Kapur managed the structure of the organization by giving the three groups enough power, but no one dominated the others.
As you said, it is difficult to change a rooted culture. One of the first things he did was fire people into a small organization. For those who stayed, he gave more autonomy and more money. Well, of course, a signal was given: do not be complacent. You have to win your dungeon. And if you do that, you will be rewarded.
A: That’s right. And people can take more responsibility if you let them. It was a good decision because the advertising industry does not pay well for consulting, investment banking and many other jobs. So the question was how to attract and motivate talented people. For Kapur it is thanks to the monetary incentive, the kind of work and the ambition and ambition that we can be number one. It was the combination of these things.
Q: In terms of brand building, Kapur is keen that brands take a long time to build, there’s no shortcut. He says, “One of the tips I would give you would be to make sure you do not run away from your market to build the global brand, build your brand first in your home country, then understand the character of your brand, the virtues of your brand and understand the heart of your brand, and if you respect that core, you can take anybody anywhere, so this brand has the opportunity to become a global brand.
A: The first question HBS poses when we execute a tailor-made executive education program in China and other areas is, “How do I create a brand?” In many emerging markets, be it China, India, or Turkey, if a local one As companies grow up and have adequate liquidity, they choose to become global, and the way they want to become global is buying a global brand in the hope that magic will spread to local brands usually not.
Godiva was bought by Ülker in Turkey. But while the Godiva brand is a leader in image, Ülker is a much lower image brand; The consumer sees no connection. It’s as if Levi decided to make an Italian costume. I will not believe in the brand, even if they make a nice suit, because my image of Levi is very casual. What we see is that the image change is taking place gradually. They build a Honda scooter, then a Honda Civic, then a Honda Accord, then an Acura. There is a lot of theory and research on how consumer behavior and perceptions change over time. And this change in the picture takes 10 to 15 years.
Many companies have difficulty understanding this. They strive to reach a global market by buying a global brand because they have the money in their balance sheet. It was interesting to learn that Ranjan Kapur was on the same page about branding.
Q: Digital is changing the advertising and some are worried that the romanticism of the industry, the passion for creation, will be swallowed up by data, analysis and return on investment. Kapur is optimistic for the digital world, but sees a big change. I think you share this vision.
A: Absolutely. Many things have changed in the advertising world. Previously, advertising was about how many people I could reach and how many times I could tell them the same story in the hope that they remembered it. Scope and frequency were the metric and the raw score point (GRP) became the terminology we all used. With Digital, you can better target people because you have more information about them. I can measure it. I can adapt it: one of my alumni has created a company that can customize a video for a million different versions. Everything has changed: targeting, personalization, measurability.
The second thing that has changed is that the company once told you what you wanted to hear. Consumers are learning a product in different ways: getting directly from society through traditional or digital advertising, finding information themselves through research or learning from other consumers and social media. Many of these things are out of control of the business. So, as a buyer, you need to think about how you influence how consumers receive and be influenced by information.
The third thing that has changed is the purchase of media. For a long time, advertising agencies have paid 15% of their media purchases. All these agencies had a large media planning group. Now you have Programmatic Buying; The algorithm does it all. When buying media, there is no longer a comparative advantage.
You suddenly need an engineering mind, you need a data analysis and you need the data specialists who work with Google and Facebook. It is a completely different ability. Martin Sorrell, the CEO of WPP, has a famous saying, “We went from the Mad Men era to the Math Men era.”
Kapur has come up with a right brain, much more of a creative kind, but now companies are suddenly asking about the return on investment. But you can not compete with Google in the Google field. You still need creation. So you have to bring the right and the left brain together. But combining both is a challenge.
Q: India has done something not to be an entrepreneurial culture. What is the level of entrepreneurship in India?
A: Indians have always had entrepreneurial spirit. I remember growing up in India, noting that people always found a way to get things done. But when it came to jobs, people were not inclined to take risks because unemployment was high and people were worried about what would happen if they gave up their jobs to start something new. In addition, there were no models in India, neither Bill Gates nor Mark Zuckerberg, which showed us that it is possible. In India you got the impression that you would not succeed if you were not born in the right family. Third, venture capitalists have recently come to India. They were partially concerned about regulation and paperwork and wondered if the government would change the rules. Even if you were willing to take the risk, no investor was willing to assist you.
This has slowly changed with the opening up of the economy. The valves are starting to open now.
Question: What is the approach for entrepreneurs in India today to start a business? Do you think locally or are you born in the world?
A: Many of them are local because India is a huge country. A few years ago, I talked to business owners there and asked them, “Just copy the American model of your business in India, is your version of Uber based on the US model, and yes, that’s how they begin, but then they realize that the logistics are different, the structures are different, the consumer behaviors vary, they start with the same economic model, but they quickly change by 180 degrees or at least 90 degrees during the execution process.