Innovation is the Foundation of Branding

Innovation is the Foundation of Branding

July 18, 2016

Prof. Amitava Chattopadhyay is an expert on branding and his research has appeared in leading journals including the Journal of Marketing Research, Journal of Consumer Research, Journal of Consumer Psychology, Journal of Marketing etc. Most recently, he has published a book entitled The New Emerging Market Multinationals: Four Strategies for Disrupting Markets and Building Brands.

Professor Chattopadhyay is on the editorial review boards of the Journal of Consumer Research, Journal of the Academy of Marketing Science, Long Range Planning, and many others. For his research, he has been the recipient of several awards, including the Robert Ferber Award. He is a Fellow of the Institute on Asian Consumer Insight. He is on the advisory boards of several companies and a consultant to multinational firms. Professor Chattopadhyay is co-directing INSEAD Leadership Programme for Senior Executives – India.

Professor Chattopadhyay holds a PhD from the University of Florida, a PGDM from the Indian Institute of Management, Ahmedabad, and a B.Sc. (Honours) degree from Jadavpur University, India. He was one of the keynote speakers in the Leadership Summit 2016, organized by Bangladesh Brand Forum on 23rd April at Radisson Blu Water Garden Hotel, Dhaka. In an exclusive interview with Bangladesh Brand Forum(BBF), Professor Chattopadhyay shared his insights on Leadership and Innovation.

BBF: How does it feel visiting Bangladesh?

Amitava Chattopadhyay: It’s always good to visit Bangladesh. I feel completely at home here because I grew up just across the border and there isn’t much difference between Kolkata and Dhaka. I feel very at home over here.

BBF: You said branding and innovation are inextricably linked. Would you like to explain about it?

Amitava Chattopadhyay: If you think about, what is a brand? A brand is a promise to a customer to deliver against a certain set of needs that the consumer has. And delivering against it is about constantly making sure that the best possible solution for that need is offered. Now, given that the world is changing, if you keep offering the same solution, it will become out-dated, and eventually, your brand will die. So, brands will need to adapt to continuously meet the needs of consumers. I’ll use the example of Dell. During the late 1980s, when Dell was founded, they used to sell over the telephone. You’d call to a 1-800 number in the US, and you would place an order for your computer, and Dell shifted it. Then, the internet happened, if Dell had continued selling over the phone, they would’ve died. But they moved from telephone sales to online sales. Dell knew that consumers don’t just buy computers, they buy a whole set of things which would inter-connect. So they started selling printers and other digital things. As they recognized that the consumer’s needs were evolving, they kept adapting their offerings in order to keep the consumers happy. They needed innovations. They moved from telephone to online, which was a business model innovation. Selling other products was an innovation in terms of offering a whole suite of products, instead of just computers. That’s what I mean when I say, ‘Innovation is the foundation of branding,’ because the world is not static.

BBF: Could you briefly share about the four Strategies for Disrupting Markets and Building Brands?

Amitava Chattopadhyay: Rather than talking about the four Strategies, let me tell you about the essence of the book that you are referring to. International businesses always looked and said that the emerging markets have companies that compete using their lower cost of labor, and so they can produce cheap goods, that is their competitive advantage. So, they will never be the big branded players, but they can always compete because they produce something for less. But I think what we have seen in the last 15-16 years, is the emergence of certain companies that are selling branded products at premium prices. Today, for example, we have brands like Samsung, LG, Haier, and HTC. These are household names, but not long ago, people didn’t even know that these brands existed. Going back 10-12 years, people didn’t even know what Haier was, and now, they’re one of the biggest household companies in the world, and they did not do this by selling for a lower price, they did it by being much more innovative. They took the idea of low cost, and applied it in the context of innovation. They do that in two ways. There are innovations at the process level, and there are innovations at the product level.

At the product level, they’re able to throw more people at the problem due to lower cost structure. This allows them to design and deliver innovative products at a lower cost. Taking Mahindra and Mahindra as an example, when they released the Scorpio, they developed it in 18 months for 150 million or 125 million dollars. If that same car had been designed in Detroit, that car would’ve taken 3 years and perhaps a couple of billion dollars to develop. So, you are able to develop products faster and cheaper. There are other forms of innovation too. Take Mindray from China. They make medical diagnostics equipment. They compete with GE, Siemens, Phillips and Toshiba, which are the world leaders in medical diagnostics equipment. Mindray uses the same sort of advantages that we talked about with Mahindra and Mahindra, but they also do other interesting things. For example, if you make a new medical diagnostic equipment from GE or Phillips, you would get a dedicated microchip for each function. Mindray uses software to do the things those microchips are able to do. The advantage of doing this is that it’s a one-time startup cost, but the variable cost is zero. So, they are able to manage the costs better.

Secondly, if you have a range of, for example, ECG machines, each ECG machines have microchips. You have a bunch of inventory, and each of them requires specific designing and is expensive because it is custom made for you. If I develop a particular software for one ECG machine, with just little tweaks in the software, it could be used for other models of ECGs. So, not only do you have a one-time development cost, but with a few minor modifications, it can be used across different machines requiring similar functions, further reducing cost. Thirdly, markets for developing nations have been exceptionally good at processing innovation. For example, India’s IT industry. The reason for its success is not because of lower cost but it is driven by the creation of a business model called “The Global Delivery Model”. In the old days, if you had an IT project, you would sent a fleet of engineers into the company. But now, you sit at you home country, the engineers log in remotely, and then you build systems and processes that allow you to do the job without physically going there. This lowers cost dramatically, because now, your engineers are at a lower cost location. You’re working in a context where, when they are sleeping, you’re working. So, if you’re doing a project in the US, then 10-12 hours would be removed from your geography. When their systems are ‘idle’, you can work on their systems rather than being disruptive. By doing things like this, you can actually create systems and processes which are more efficient. You have to convince your clients that you are capable of doing your job, so you have to document the systems and processes by which you are going to do it, and if you talk to a consultant from an Indian company, they’ll say that their ability to deliver projects on cost, on time, is far higher than what it was 40 years ago, when ‘body shopping’ was the model, where you’d have to send the bodies across to work on projects within the company. So, innovation and how the business processes work rather than just raw cost advantage is being used to succeed.

BBF: You are extremely connected with your readers or audience via your website. This is really an incredible practice. What inspired you to do such?

Amitava Chattopadhyay: Actually, it was a student of mine who inspired me to do it. He told me to take the stuff that I talk about and build a website so that I could communicate with a wider audience, and I thought it was a great idea. He was kind enough to help me design the website and I was very pleased with all the great stuff that he did. Not only did he inspire me, but he also helped me to do it.

BBF: You have shared many musings on your website, covering different topics. One interesting topic you talked about is how to communicate a new product effectively. Please share few words on that.

Amitava Chattopadhyay: When we think about communication, we think about it in a very narrow way. We think that it is the marketing and advertising people in the organization that are doing it I think that fundamentally, every action that a brand takes is communicating something, and to my mind, you have to bring the whole organization around to say if they are doing the right thing to communicate exactly what we want. For example, if I see a van carrying a brand on the roadside and the van driver is driving rashly, or if the van is not maintained, then that impacts my beliefs on that brand. So our perspectives about communication are very narrow and we only emphasize on the bit that we formally do. Even on customer service- how you dress, how you speak, how many rings it takes for the customer hotline to pick up, how many hours or days does it take for the brand to respond to your call for service. All of these communicate about the brand. If I meet someone who is a great person, then I can say that the brand that employs you must be a great brand, but if you were someone who I didn’t like, then my perspective of the brand would be negative. We really have to think about what we are trying to communicate, and that means we have to look at the people we employ, the kind of infrastructure that we deploy-everything has to become aligned so that the right things are projected. Again, going back to the Indian IT industry, if you visit their so called ‘campuses’, it’s as if magically, you’ve stepped from the developing world to the developed world. It has modern buildings, has well paved roads, golf carts carrying people from one place to another. It’s like a magical transformation. Outside, is the rest of India, and inside you have the developed world. What they are trying to communicate is that they are just as good as any IT solutions provider from the developed world, and by having these ‘campuses’ give that same feel.

BBF: You also said that the shape of a company’s logo matters. Tell us about that.

Amitava Chattopadhyay: Let me take your question in a slightly broader perspective. We looked at shapes in that particular research, and what we were saying is that the shape that a company’s logo has leads people to make certain inferences about that company, which then influences judgments of the products and services that those companies offer. The perceptual characteristics of logos should go towards color, towards any sounds associated with the particular company. For example, Harley Davidson motorcycles have a patented sound. The sound is deep and powerful, and when you hear that sound, it gives you an impression of what the motorbike is like.

BBF: Recently you tweeted, “When building a castle (#brand) build the foundation first.” What exactly do you mean by that? Can you explain?

Amitava Chattopadhyay: It was a tweet with a link about Walmart exiting much of its business from Brazil. It was an article that talked about the fact that in Brazil, the various offerings that Walmart had lacked clarity in the consumers’ minds. The result was that they had expanded quite rapidly, and since a large number of stores did not perform well, they had to shut them down. So essentially what I was saying is that, before you start expanding, you need to be clearly articulated about what you stand for and which consumer groups you are addressing.

BBF: In your opinion, what is leadership, and what are some of its characteristics?

Amitava Chattopadhyay: Leadership to me is about being able to get others involved in an endeavor to along towards a common purpose. You have to have the capability to bring people on board, to view a common purpose and to act in a consistent manner- that would be some of the fundamental advices for leadership.

BBF: What are your observations on Leadership Summit 2016?

Amitava Chattopadhyay: It’s an interesting summit. I was unable to attend the morning sessions, but the afternoon sessions, with Prof. Cummings was a excellent talk and I enjoyed the facilitation of team ‘Boom Boom’, which was a great idea because I think we need to recognize future talent and in some sense, the summit itself shows leadership by Bangladesh Brand Forum by bringing an important topic into focus and giving it the attention that it deserves. I think that it is interesting because the event is nice, and at the same time, it is also showing leadership, which is great.

BBF: Tell us about your topic.

Amitava Chattopadhyay: My topic for the talk was that, many organizations see innovation as important but they feel that to have innovation, what we need is tools, processes, money, etc. And they invest a lot on that part. But I think that it is inefficient because it’s not just about the tools and processes, it’s equally, if not more importantly, about the culture of the organization. And having an innovative culture requires active engagement in leadership. That piece is what I wanted to emphasize in my talk.

BBF: What would be your message for the aspiring future leaders?

Amitava Chattopadhyay: I think a key element of leadership is being able to think outside the box and take risks, and I think that’s a capability that one needs to develop and nurture and in many ways, our culture conspires against that. In fact, in the morning session that I was referring to, we were talking to university students and the issue was how to succeed in life, if you will become a leader. It is, if you will, breaking out of doing things the way everybody does it to doing it the way one thinks it should be done, and having the self-confidence to step out. Let me give you my personal example, when I finished my BSc degree, I did rather well in my university and I got a scholarship to do MSc, but I decided to get a job, and start working. My relatives were critical about my decision for leaving my education to pursue a career. Two years after I started working, I realized that without getting an MBA, there was very little future for me in the job that I had. So I got into an MBA program, and I did quite well. The people who were critical of me now were criticizing me for leaving my job to pursue my MBA. So, you’re always wrong, some people will always find fault with what you do and you need to build the self-confidence to say, “This is how I want to build my life.” I think that is a sense of personal leadership. Yes, I need to hear what other people had to say because I need to reflect on the merits of what they’re saying but I also need to learn how to make my own decisions that I think are right for me, my organization and the current moment in life because that’s my job as a leader.

No Comments so far

Jump into a conversation

No Comments Yet!

You can be the one to start a conversation.

Your data will be safe!Your e-mail address will not be published. Also other data will not be shared with third person.