Jul 10, 2008

Marketing - Maintain a power distance

Indian society is a pyramidal construction with the power gradient being steep between levels/classes. An age-old structure that Indians are very comfortable with. And the truth about a pyramidal structure is that in such a structure you either look up or look down at other people. There cannot be a third way, a relationship of equality. In such a structure either you rule or you are being ruled. Therefore the only relationships that the Indians have existed comfortably in are of either superior or subordinate.
Added to it is the historical experience of society handling power. There haven’t been too many instances in history of the middle class holding power in India. Whenever a part of the middle class has acquired power, suddenly those parts have generally displayed a change in behaviour which has been towards becoming rude. (The neo-rich class has at times tried to aggressively assert its dominance in an ugly way.)
By and large, mainstream Indians (or the middle class) are bad masters – they don’t know how to handle authority. We’ve never been good to people below us. We’ve never been too courteous to sections that perform menial tasks and in this regard we find that people in some of the Western societies are far more courteous to the bartender or the guy at the gate or the valet at the car park. The Power Distance Theory
A more scientific understanding of this behaviour comes from the study of different cultures by Geert Hofstede on various dimensions. The Hofstede model of five dimensions of national cultures has analysed and differentiated societies from 50 countries on the basis of Power Distance, Uncertainty Avoidance, Individualism, Masculinity and Long-Term Orientation. One of the dimensions on which the 50 countries were plotted and differentiated was the Power Distance Index (PDI)
Power Distance was defined as the extent to which the less powerful members of organisations and institutions (like the family) accept and expect that power is distributed unequally. This represents inequality (more versus less), but defined from below, not from above. The most important bit is that it suggests that in a lot of societies the level of inequality is endorsed by the followers as much as by the leaders. All societies are unequal, but some are more unequal than others. On the basis of how people in different cultures willingly accept or reject these inequalities the societies in 50 different countries have been classified as small and large power distance societies.
Some of the characteristics of a large power distance society are:
Power is a basic fact of society ante-dating good or evil: its legitimacy is irrelevant
Parents teach children obedience
Older people both respected and feared
Teacher-centered education
Hierarchy means existential inequality
Subordinates expect to be told what to do
Corruption frequent; scandals are covered up
Income distribution very uneven
Religions with a hierarchy of priests
India has Power Distance as the highest Hofstede Dimension for the culture, with a ranking of 77 as compared to the world average of 56.5. This score indicates a high level of inequality of power and wealth within the society. What is important to understand is that this condition is not subverted upon the population, but rather accepted by the population as a cultural norm.
This is where India completely differs from some of the Western cultures such as Sweden, Austria, the UK, the US and Australia who have very low PDI scores less than 40 and hence are classified as low power distance societies. Hence the relationships between entities there are more equal and less hierarchical.Power distance between brands and consumers
What this means is that in the low power distance societies it is possible for brands to have the relationship of equality with the consumer. The brands can ascribe the status of ‘King’ to the consumer and yet retain the status of equal in the hierarchy. But not in a high power distance society such as India and the others. And therein, perhaps, lies the reason for the problems the service brands are facing in controlling their relationship with the consumers.
In the Western markets the consumercentric nature of brand management slowly evolved to putting the consumer at the centre of everything and started treating them as kings. But since these were all small power distance societies, even while treating the consumer as the ‘king’ the brands themselves didn’t have to compromise their own position.
Not so in a high PDI (Power Distance Index). In such cultures there can only be a hierarchical relationship between the consumer and the brand. The servile nature of the business puts the service brands at a disadvantage in consumer relationships, and over and above this when their ‘let the consumer be king’ model comes into force they completely become subservient to the consumer, leading them to start treating them with the same disdain they treat any subservient entity in their culture.
This explains why, as the service brands are falling over each other to please the consumer he is treating them with more and more contempt. Not that he dislikes being given importance but because that’s the only way he knows to treat his subject.
This also explains why the consumer was more respectful 10 years ago when he wasn’t treated too well by the State-owned brands. It is very simple. Intentionally or otherwise, the service providers then kept the power with themselves and the consumer, comfortable with being at the lower rung of the power equation, gave the brands the status of the ruler and was happy to be ruled.
But in today’s scenario, the brands have a serious challenge in front of them to retain their premiumness. Can’t Be King: What does it mean?
It simply means the brands need to be always at a higher level of hierarchy than the consumer if they need to protect the premium-ness. If the choice has to be made then the brand should be the king.
So are there examples of brands that seem to be doing it right? Are there service brands that behave like kings and have people following them? Well, there are many such as Gymkhana Club and India Habitat Centre which enjoy high premium simply because of their exclusionist positioning. The most interesting case in point is Kingfisher Airlines which seems to be climbing fast on brand preference among fliers in India. The whole experience is built almost as an invite from the king to his private kingdom to enjoy the luxury. It offers you great service but keeps itself on a higher pedestal and doesn’t compromise its position in the whole equation. Therefore it is very much possible to keep the consumer at the centre without having to make him King.What it does not mean
What needs to be understood is that this is not about treating the consumer disdainfully. The brands will need to provide the best of service but what they need to avoid is becoming too eager to please the customer. Across all consumer touch points we need to be careful about our status in the relationship.
The greater the number of humble telephone calls I receive from the customer service asking if I’m happy the more I will start asserting my ruler status on the brand.
The service brands need to be careful when they’re training their staff in the softer skills. They need to be told the difference between being polite and being servile. The CEOs of top companies should not appear in a servile avataar in TVCs even if they’re handling some delicate PR issue. I would always recommend the way Vijay Mallya invites you aboard his flight. That looks like a ‘King’ inviting you to his kingdom. The equation with the consumer is therefore stated clearly in the very beginning.
It is also not about being niche and mass. The argument that by increasing the power distance from your consumers you will become niche is also not correct. In fact, the brands with more power distance from their consumers will always be the bigger and more desired brands than others. Sonia Gandhi and Shah Rukh Khan are examples of two celebrities in India whose popularity has increased in direct proportion to their power distance from their consumers. And in market share terms they are bigger brands than any other in India.
After the telecom and financial services the next wave of service brands to hit Indian consumers will be from retail, entertainment and food services. Before they make plans to rule the market they need to decide who will rule the relationship.Not just India
Indian has a PDI of 77. But then there are countries such as Russia, Romania, Mexico, Bangladesh and others from the Arab world with PDI scores higher than 80. The service brands will have to make similar choices in those cultures as well. Other cultural dimensions will affect the overall consumer behaviour in each country but brands will have to decide which side of the power equation they want to be on.
Therefore, let the brand always be the King. Or at least the consumer should never be.

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