Three Ms of marketing

Hand-overs of corporate batons are typically well choreographed affairs. So it is with Harish Manwani's taking over as non-executive chairman from M S Banga at a company that has pretty much defined what marketing is all about in India, Hindustan Lever.

What makes it interesting, however, is that while the two men seem so unlike each other in their ambitions for the company, they are so much in consonance on change being discontinuous rather than incremental.

By this thesis, the idling phase of the past few years, as the company's brands appeared to stumble about in the darkness of "downtrading" (consumers switching to cheaper alternatives), is more or less over.

The company, say its defendants, only appeared to be idling. It used the time to emphasise efficiency, sharpen technology, deepen rural "self-help" penetration, study consumer behaviour, and re-focus the brand portfolio into a 35-brand power force. All this, even as domestic operations were restructured to separate the management of food from home and personal care products.

That done, the time has now come to show top line growth once again; that is, the good old business of wooing consumers into brand relationships that satisfy their daily needs and make the company money. But the task is not simple, say sceptics who see "discontinuous growth" as a lame excuse for poor performance since 2000.

For one, the Unilever-imposed 35-brand formula is out of whack with Indian market realities, what with such a kaleidoscope of consumer needs and wallet sizes. For another, soap and suds have got supplanted by mobile telephony and suchlike as wallet-openers across strata, so Lever may be deluded about the growth potential.

Look closer, though, and you will find that scepticism on those counts is hard to justify. Lever has not devoted its energies to its 35 power brands, to the exclusion of all others. It still uses brands of Indian origin, for example, to refreshing effect. Also, there is always some growth opportunity for brands that operate beyond the limits of product functionality. It's a matter of market stimulation.

The question is whether Lever has it in it. For those who care to listen carefully, Mr Manwani has put out the broad contours of a growth formulation. Hours after taking over, he spoke of an integrated "3M" approach: margins, market share and middle-class.

At first, this sounds like more of the same. Engaging the middle-class has always been critical to the company's success. But don't yawn. It's the other two Ms, the dynamics of which are understood only by those who probe deep into their inner workings, that deserve a second thought.

Instead of assuming market share at the cost of margins, or vice versa, Mr Manwani is quite clear that the two need to be mutually reinforcing. This could be dismissed as gushy idealism of the sort dreamt up by pony-tailed people at ad agencies.

Or it could be taken as an earnest call to seek liberation from self-imposed rigidities on either side, and to thus imagine a relatively elastic relationship between the two""with the third M, the middle-class, enabling this new sense of elasticity through the enthusiasm of its response to the aforementioned stimulation.