The future will be driven by the aspirational middle class: B Thiagarajan, Blue Star

At the Pitch CMO Summit 2024, B Thiagarajan, Managing Director, Blue Star engaged in a fireside chat with Dr Annurag Batra, Chairman & Editor-in-Chief; Co-Founder, Businessworld & exchange4media, around all things marketing and customer-centricity. The duo delved deep into what brands are doing, to keep customers at the centre.

Dr Batra started the chat by pointing out how, in today’s era, politicians are emerging as the topmost businesses that are extremely customer-centric. “They know how to set their narratives; they know how to be experiential with their audiences, and they know how to look at data and that is what makes them customer-centric,” he said.

The aspirations of Indian consumers are on the rise. Brands are constantly adapting to the changing digital landscape, with regards to reaching out to actual TG versus prospective TG. Dr Batra also pointed out how the macro environment has also been evolving.

Thiagarajan voiced a similar stance and noted that indeed, for brands like Blue Star today, the growth is driven by the aspirational middle class. “The future growth will come from the likes of tier 3, 4 ,5 cities,” he added. Drawing a comparison with the West, Thiagarajan mentioned how with the complexity that the Indian market houses, marketing in the United States might be easier as compared to marketing in India.

The marketing mix, according to Thiagarajan, has changed. From being just 4 P’s of marketing, the model now needs to have a ‘D’, which stands for ‘Data’. For instance, consumer behaviour at a store in Mumbai versus in a store in Meerut will be quite different. “And that is where the data comes into play,” he said.

Thiagarajan shared that most marketeers or CMOs are based out of the metros or Tier 1 cities. “I think a lot of them don’t travel to these smaller markets,” he said. He also shared that Blue Star gets 65% of its sales from tier 3, and 4 markets. More than 50% of air conditioners are bought through consumer finance and more than 90% are first-time buyers.

With the onset of the summer season, companies like Blue Star are gearing up for a battle in the advertising landscape. The fuel to this competition, according to Thiagarajan, is that with summer comes the vacations, several big movies are slated to release, and mega events like IPL & Elections are around the corner. Brands across sectors are tightening their belts to dive into the communication game.

“Here, it is not only about communication. It is about the relationship. I need to know what the customer needs, that is the whole premise of customer centricity. And that insight on need will only come from extensive research. I am not very sure that the spendings on research is good enough, by the industry at all,” Thiagarajan pointed out.

From a pricing point of view, he explained that by being customer-centric, brands can estimate what price consumers are expecting. “So then you can develop a product at that particular price point,” he said.

The discussion also ventured into the growing relevance & importance of e-commerce, where even if the brand is predominantly selling offline, e-commerce should still be in its marketing mix to enable comparison of products before purchasing, thus again striking consumer centricity. “The Philip Kotler model will not include this,” Thiagarajan jokes.

The raging topic of the IPL season also found its way inside the chat, where Batra wondered if brand associations during the mega sporting event are going to become extremely expensive, considering the merger of the two big media conglomerates that hold the broadcasting rights.

“I don’t think so,” said Thiagarajan. He feels that it is set to double in the next three years instead. “If you compare with international standards, India is still cheaper, so that is not the issue. The issue is connected with the fragmentation of IPL or the reach through IPL, there is SD, HD, CTV, Digital. You cannot address this country with just one medium.”

The discussion concluded with Thiagarajan advising CMOs that, for them to become CEOs, they need to continue to learn. “But most importantly, it goes back to customer centricity and how well they can connect with the customers,” he noted.