CONVERSATIONS IN LEADERSHIP - Nielsen

1NIELSEN CXO SERIES Copyright © 2013 The Nielsen Company

WITH KURUSH N GRANT, EXECUTIVE DIRECTOR, ITC LTD.

NIELSEN CXO SERIES

CONVERSATIONS IN LEADERSHIP

M A Y 2 0 1 3

2 NIELSEN CXO SERIES

As a brand, ITC has enjoyed more than a century of goodwill and

irrefutable success in the Indian economic landscape. Over the years,

the company has set benchmarks in terms of brand diversification,

environmental conservation and groundbreaking business success.

Its portfolio encompasses a plethora of verticals including FMCG,

apparel, education, hospitality, paper, packaging, agri-business, and

information technology.

Kurush N Grant, Executive Director, ITC Ltd. shares the organisation’s

unique philosophies, market outlook and strategies in an exclusive

chat with Piyush Mathur, President, Nielsen, India Region.

ITC LTD. EXECUTIVE DIRECTOR KURUSH N GRANT (RIGHT) IN CONVERSATION WITHPIYUSH MATHUR, PRESIDENT, NIELSEN INDIA REGION

IT IS OUR ABILITY TO UNDERSTAND CONSUMERS AND COMPREHEND HOW THEIR NEEDS EVOLVE THAT HAS HELPED US IN OUR SUCCESS.


BE IT URBAN OR RURAL INDIA,YOU NEED A BASKET OF SERVICES AND PRODUCTS TO MEET BOTH EXISTING AND EMERGING CONSUMER NEEDS.

THERE IS AN OBVIOUS SLOWDOWN IN THE MARKET IN TERMS OF MANUFACTURING GROWTH AND CONSUMER SENTIMENT. HOW IS ITC MANAGING THIS SLOWDOWN?

ITC has a variety of businesses and consequently the business

cycles of each of the verticals tend to be different. FMCG tends to

be relatively less volatile, compared to industries like paper and

hospitality. The level of volatility is much lower at ITC because of our

mix of businesses and in some cases, because of the counter-cyclic

nature of volatility. Even if India Inc. delays or expedites investment

decisions by three or six months, it is certainly going to help the

economy; it will give the right signals as a lot depends on the

confidence levels.

ITC STANDS OUT FOR ITS RURAL INITIATIVES. THERE IS A LOT OF TALK ABOUT MIDDLE INDIA EMERGING AS AN IMPORTANT FORCE. WHAT IS YOUR TAKE ON MIDDLE INDIA VERSUS RURAL INDIA?

We look at India as a conglomeration of different markets with

characteristics of each depending upon demography, population size

and so on. The reality is that if we take a smaller scale, for example a

city like Mumbai, the differences within this market alone are more

pronounced than the differences between rural and urban India. In

fact, it is a ‘horses for courses’ approach. Be it urban, rural, midtown,

or small town, one has to provide a basket of services and products

that will satisfy both existing and emerging consumer needs. We have

never looked at it based on rural or urban or Middle India. Having

said that, our roots lie in adding value to agriculture and consequently

our relationship with farmers. We ensure that the farmers get the best

possible deal and consumers get the best possible price. I believe this

is what makes us successful.

WITH CHANGING CONSUMER NEEDS, WHAT IS YOUR INNOVATION STRATEGY?

It is important to understand what the consumer thinks and

believes, their value systems and expectations. We invest heavily on

understanding the consumer. In fact, we started formal marketing

research in India long back and are still one of the largest spenders

and users of formal market research in this country. It is this ability

to understand consumers and comprehend how they and their needs

evolve that has helped us in our success. The same ethos is carried

along in our partnerships.


INDIA WILL BE ONE OF THE FEW ECONOMIES IN THE WORLD WHERE MODERN TRADE AND TRADITIONAL TRADE WILL CO-EXIST.

INDIA IS PRIMARILY A TRADITIONAL TRADE ENVIRONMENT. HOWEVER, MODERN TRADE IS ON THE RISE AND THERE ARE SHOPPERS WHO PATRONISE BOTH FORMATS. HOW DO YOU PLAN TO ENGAGE THIS CROSSOVER SHOPPER?

We tend to forget but India has had modern trade for a long time. In

fact, Delhi’s Connaught Place is one of the best examples of malls

that were opened years ago. The Subodh Bazar in Delhi and Sahakari

Bhandar in Mumbai are among the earliest examples of modern trade

concepts. In fact, it was the government of India that brought in

modern trade into the country.

It is important to understand three factors about the Indian market.

We are entrepreneurial people, we are a democracy, and small

industries are encouraged to grow. As a result, a number of small

retail outlets are coming up in the country. Therefore, the so-called

traditional retail will continue to grow. I believe India will be one of the

few economies in the world where modern trade and traditional trade

will exist successfully. For example, the correlation between traditional

retail and the large format wholesale modern trade outlets is working

well.

SOCIAL NETWORKS LIKE FACEBOOK AND TWITTER TODAY PLAY A SIGNIFICANT ROLE IN DETERMINING A BRAND’S IMAGE AND SUCCESS. HOW MUCH IMPORTANCE HAS ITC ATTRIBUTED TO HAVING AN EFFECTIVE SOCIAL MEDIA STRATEGY?

When we talk about social media, we tend to look at modern digital

social media. However, the basic precepts and principles of spread

of information remain the same - whether it was through telephones,

gossip sessions amongst friends or more organised and faster

methods. Ultimately brands and thoughts are moved by consumers

and individuals. Advertising tries to influence brand choice but

eventually, it is word-of-mouth that makes a difference. Going back

nearly 30 years when I first started working for ITC, I remember the

rate at which information about a new event or a new product would

spread. I distinctly remember an example in Kerala where a new

product was launched only in Kochi but within 24 hours almost every

retailer in the state knew about it!

There is better technology today to make sure that the word-of-

mouth spreads faster. The biggest advantage is that you can also get

important feedback about the products directly from consumers.


THERE ARE SEVERAL USES OF SOCIAL MEDIA THAT COULD GO BEYOND MERELY CONNECTING WITH AUDIENCES. ANY THOUGHTS ON HOW IT COULD BE USED DIFFERENTLY?

The chaupal system in India, which was developed by ITC years back,

does exactly that. Farmers can ask questions, get information and

give their own views and advice, which other farmers can listen to and

utilise. The beauty about this is that it adds value to agricultural India;

it not only helps the farmer get a better price for his or her produce

but also helps increase productivity.

CONSERVATION IS DEEPLY INGRAINED IN ITC’S CULTURE. THERE MIGHT NOT BE ANY OTHER COMPANY IN INDIA WHICH FOCUSES SO MUCH ON ENVIRONMENT AND SUSTAINABILITY. HOW DO YOU THINK OTHER COMPANIES ARE PERFORMING IN THIS DOMAIN?

We realised that being environmentally conscious and aware of the

immediate neighbourhood in terms of inclusiveness is probably the

best business practice you can have. It is an enlightened self-interest.

Also, the recycling, reusing, reducing mantra for conservation is

good not just for the environment, but also for business. Similarly,

involving local communities in our processes and integrating them

into the value chain is good for both parties. It is a win-win situation

and we hope that more companies move in this direction. There are

several companies which are doing good work and we hope the trend

continues.

MANY ORGANISATIONS TALK ABOUT CSR BUT IT SEEMS TO BE A SIDE ACTIVITY. THERE ARE VERY FEW COMPANIES THAT WOULD EMBED IT AS PART OF THEIR WORK CULTURE. DO YOU THINK MORE COMPANIES WILL DO SO IN THE FUTURE?

More companies are working towards it. At the same time, there are

organisations that do not have the necessary skills and competencies

in terms of inclusive growth and therefore they outsource this activity.

If the outsourcing is done well and monitored, it will work. The best

way to go about it is to build a business model like ours where it is

ingrained.

ADVERTISING TRIES TO INFLUENCE BRAND CHOICE, BUT EVENTUALLY IT IS WORD-OF-MOUTH THAT MAKES A DIFFERENCE.


ITC HAS COMPLETED 100 YEARS, AND IT’S BEEN QUITE A JOURNEY. THE WORLD IS A FAR DIFFERENT PLACE TODAY AND THE CHALLENGES ARE MANY AND VARIED. HOW DO YOU SEE THE NEXT DECADE EVOLVING?

ITC is growing and changing. It has always been evolving but the rate

of evolution over the last 20-30 years has been interesting and fast.

This change will continue. Whether we will launch a series of new

products or categories is uncertain, but it is certain that we will move

along the road we have chosen. This path is good for the business, the

environment and also in terms of inclusivity. This ‘triple bottomline’

approach will be the key to our growth.

THE RECYCLING, REUSING, REDUCING MANTRA FOR CONSERVATION IS GOOD NOT JUST FOR THE ENVIRONMENT, BUT ALSO FOR BUSINESS.


ABOUT NIELSEN Nielsen Holdings N.V. (NYSE: NLSN) is a global information and

measurement company with leading market positions in marketing

and consumer information, television and other media measurement,

online intelligence, mobile measurement, trade shows and related

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trademarks or registered trademarks of their respective companies.

The interview was conducted in September 2012. The views and

opinions expressed in this article are those of the client and do not

necessarily reflect those of Nielsen. All data provided in this article is

for informational purposes only.


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CONVERSATIONS IN LEADERSHIP - Nielsen