Bernd H Schmitt is a Robert D Calkins professor of international business at Columbia Business School in New York. He is also the executive director of the B-school’s Centre on Global Brand Leadership. Schmitt is widely recognised for his major contribution in the fields of branding, marketing and management. He has also authored numerous books and articles and has worked with top global companies like Ericsson, Estee Lauder, Henkel, DuPont, Sony, Samsung, Microsoft, Motorola, Unilever, Vodafone , Pfizer, Proctor and Gamble, etc. In an interview with DNA Money’s Nandini Goswami, Schmitt spoke on various issues facing global companies and his perception on India Inc and its leaders in terms of marketing and branding. Excerpts:
You’ve worked with many leading global companies and also been a keynote speaker for them. What is the common thread as far as branding and marketing is concerned? In almost every organisation, brands go beyond mere functional characteristics, they create an image of the company and are commercial symbols. However, what is missing in this is a focus on customer experience. Well, all companies go for traditional branding, which is done through logos, by creating an image through advertising and a lot of this is done internally, within the organisation. Top-level management decides what the brand personality should be without much customer inputs. As a result, when they are done, branding is more about what a company thinks of itself, but not exactly what the consumer would like to relate with.
Do you see this happening in big global companies as well?Oh, yes. I’ve done projects for financial services, telecom companies, car businesses — all of them have well-defined brands, essentially wanting to be innovative, approachable and responsive, which do not mean much to a customer. These are buzzwords, which a company uses into advertising to create an image of itself.
Are you seeing changes coming about globally on customer perception?In the past five years, customer interaction has become a hot topic as companies are gradually realising that the brand-value approach is not getting anywhere. The experience movement started when I wrote a book on customer experience in 2003.
The entire global economy is going through difficult times, led by a recession in the US. How do you see global leaders tiding over the situation when it comes to branding and innovation?Financial crisis can date back to Enron, where trustworthiness and honesty were issues. Nowadays, the crisis could be related to investments that customers are not aware of. Branding should be seen as an internal approach and you need to get your employees behind the brand. Branding should be used as a part of the change management.
Your perception about Indian brands? India has become a happening country in the last three to five years. My perception is that India has done a weak job for many years in terms of branding the country as a place where change is happening and where foreign investment would be welcome. It has also been behind China on issues of actual performance and image until very recently.
What about potential business leaders of India, is there a problem of quality?Talking about Indian business leaders, there is no problem of quality but they are largely engineering-driven. This means they are perfect when it comes to getting across a degree of standardisation, process management, cost-cutting, production quality, etc. But, frankly, branding is about creativity, doing things differently, understanding customers better. There is a huge middle-class that dreams of being big. Traditionally, Indian managers are well trained on engineering aspects but connecting to people and their lifestyles is still not too strong.
What is your prescription to tackle this issue?Well, it starts with educational training from primary levels. The need to be interactive and question is very important. In my latest book, Big Think-Strategy, there is a concept to challenge the sacred cow. It’s not being offensive at all, but to bring to the fore that there are certain things in an organisation that is sacred and cannot be questioned. For example the ‘big think’ in Dell Computers was to sell computers directly to consumers. The sacred cow earlier was that it was sold through stores only. Apple, today, considers many things as lifestyle, which, were earlier technology products. Dove from Unilever runs an international campaign on ‘real women’ and does not think that only women with perfect bodies and skin should use this product.
Do you think questioning is bit difficult in family-run businesses in India? Frankly, a lot of things are trade off. Family-run businesses are common in Asian countries. Some of the biggest benefits is that family-run businesses take decisions very fast, although at times the diversity of opinions is not represented. Samsung is a good benchmark. Being on the marketing board of Samsung, I must say that the company has been immensely innovative and has achieved a lot going past Sony.
What are the three most important issues regarding branding for Indian companies?They need to move out of the mentality that branding is about a product. It is about customer interaction, which is the moment of truth. They need to understand that branding is both external and internal, and about managing the organisation. Lastly, innovation, not copying, is the key to be the best in business. I must mention some of the business groups, such as the Tata Group, have done a terrific job on the innovation front by creating a quality product at a low price, which has scared many manufactures of the West.
Broadly, which are the companies you feel have changed and have lived up to the customer’s experience?Apple has done a phenomenal job with the i-Pod and the i-Phone-its vision to all its employees was to “think differently”. Samsung has also changed over the last few years. Among car companies, Audi is doing very well, in fact outperforming Mercedes in many countries. The financial industry is much behind in customer experience, I feel, although they are big brands.
Do you feel that there should be changes in curriculum of business schools in India?Back in Columbia Business School, it is extremely innovative. There are concepts of social emotional skill sets, which is very important for business leaders for which we do a course on social intelligence. There is a need to understand the psyche and consumers of different parts of the world as companies are going global.