Vitika Banerjee, General Manager of Consumer Marketing – Philips Electronics India

Vitika Banerjee joined Philips Electronics India as General Manager of Consumer Marketing in June 2008. In this role, Vitika is responsible for strategic initiatives to drive growth and market leadership of the kitchen appliances category in India, including innovation management for new product development. Previously, she held management positions with Avon Beauty Products and Unilever.

What are the keys to maximizing the major opportunities for brands in emerging markets like India and the other APAC countries in which you have experience?

Most organizations have realized the importance of addressing the uniqueness of large emerging markets, especially markets like China, India, Brazil and Russia. A large number of organizations are actually going “glocal,” which means that they are bringing their best corporate marketing practices but also firmly committed to generating and using local insights to drive business growth. Therefore, they are essentially global organizations working locally.

To effectively put this in practice, these organizations need to be organized around their customers and around the consumers that they seek to build business with. This means that not only do they need to have local marketing activation teams—which is really about growing business in these countries—but they also need resources that will deliver quality insights and convert these insights into propositions that fuel the innovation roadmap with speed and effectiveness.

These organizations need successful innovation because if they don’t provide that with consumers, there are a large number of domestic entrepreneurs who will, and that’s where the battle is. We are operating not in blue ocean markets anymore; we are very much in red ocean markets, and it’s a battle for market share.

How do you evaluate the specific business opportunities and innovation in these markets?

There are four mega-trends that are becoming very evident in most of these emerging markets. These markets are at different stages of maturity, but there are some strong common trends.  The first, of course, is the rapid urbanization. Joint households are slipping into nuclear families specifically, for say, kitchen appliances. Therefore, it’s growth in kitchens per capita. There is increasing number of working women, so time and convenience are at a premium. Smaller homes mean smaller area, so organizations need to address these concerns in their product development.

The second big trend is the shifting demographics—specifically, rising education. There’s rising awareness and aspirations. A significant size of the middle class is emerging with aspirational values and rising disposable incomes. On the other hand, there is really a rapid growth of the high-end segment, which already is an aware, mature segment with access to international labels and solutions.  So there is a very rapid shift in demographics in these emerging markets. 

The third big trend is the growth of modern retail. Professional retailing is emerging swiftly and is also the fastest growing distribution channel in these countries. This is facilitating the delivery of a superior brand experience to the end consumers. And service is becoming a very important attribute for successful marketing. So there are now additional touch points to engage the end consumer more meaningfully.

The fourth such trend that we are all sort of getting bombarded by is the media revolution and digital explosion.  Now it’s possible to reach and service end consumers using cost effective channels.  Online is a strong alternative channel for certain consumer groups. And in countries like India and China, where geographies are really widespread, it’s also a channel that is facilitating access and reach to remote locations which physically may not be possible for organizations.

So these four trends are really creating opportunities for organizations, especially industries like domestic appliances, durables, electronics, that are poised to grow quite rapidly in emerging markets if the organizations are able to leverage these trends to their advantage.

How are you adapting and personalizing global marketing messages to customers that are quite different across various emerging markets?

Organizations that are successful have actually restructured themselves. They are not only global entities, but they have focused themselves and their resources around these countries. In the traditional structure, you would have product development and marketing sitting in a central location. Today, because these countries have very unique needs and ethnicities that drive strong cultural influences, companies must now restructure themselves around these customer markets.

In developing these local portfolios within the global effort, what are the best ways to handle the transfer of knowledge, best practices and innovation insights from one market to the next?

Even in these global organizations, there are processes one can employ to make for a more efficient and a more process driven operation. Usually, it’s done in smaller core cluster teams that share best practices within forums.

For example, we run a very successful program here in India which is really to get more intimate with the consumer by developing a deeper understanding of their needs. Our program facilitates easy access for the marketing fraternity to go and meet consumers when they like and ask for their requirements and interests. We observe consumers at home or in their shopping environments, and that helps us dig deeper for insights that we can then convert into propositions for successful business solutions.

It’s a program that has been shared across sectors and across global forums, and it’s now documented as a best practice and is being implemented in other locations. Global organizations need great ways to share knowledge, learn from each other, and get the best practices to get the best out of their territory.

Finding value in online consumer reviews

By Leon Zurawicki, Author of "Neuromarketing: Exploring the Brain of the Consumer" and Professor of Marketing at the University of Massachusetts, Boston

Among the risks travelers face, a bad hotel experience can easily spoil an entire trip. Such concern raises the question of how, while planning a trip, voyagers can effectively manage available data to reduce potential for disappointment. Accordingly, we recently conducted a study to determine how to extract relevant insights from online customer reviews. Considering the proliferation of review sites on the web—many of them linked to reservation services—it is not surprising that 17 percent of recent travel survey respondents turned to internet pages for travel information. It is the relevance of online comments by actual hotel patrons, however, which warrant a closer look at the search strategies.

Availability of "raw" data is of great interest to the hotel industry, to the academics studying the patterns of evaluations and, perhaps foremost, to the customers themselves. Note that real experiences have been shared with fellow travelers and what makes such comments particularly valuable is that they are colored with personal emotions.

Our study used data collected from Tripadvisor.com—the most popular online travel review forum—and focused on Boston, a major US gateway and a popular city with businesspeople and pleasure travellers, as a destination. The website lists 73 Boston hotels and provides over 21,000 reviews. Except for a general cursory evaluation, this study relied on comments posted during the past year ending March 2011. In order to render this work more manageable, only the 16 top-ranked establishments were considered. Through that methodology, we identified 1117 reviews for the period in question.

Importantly, for the best Boston hotels, the mean ratings on "value" dimension were higher for the 4 and 4.5 star class hotels than for either the 5 star or 3.5 star hotels. No 2 and 3 star hotel even made the top 16. This confirms a similar previous result for London hotels, and may suggest that a higher class of hotel elicits the over –proportionate perceptions of value based on image. However, after reaching a critical level, the higher room prices at top class hotels lead to ever higher expectations which are hardly ever met.

Initially, our analysis focused on the average ratings for each hotel and on each attribute evaluated by the commentators. The preliminary scrutiny rendered interesting results. The ratings for value, rooms, location, cleanliness, service and sleep quality averaged over the last 12 months diverged substantially from the cumulative historical ratings, in particular with respect to "Value." Specifically, for six out of the top 16 hotels, the average for the recent period was lower than historical ratings. Whether consumers have become more demanding, the quality of service has deteriorated, or the prices have gone up are variables that still need to be established. Further, out of the six attributes measured, the ratings for value proved the lowest, while those for cleanliness and location the highest.

Also, the summary ratings of business travelers strongly correlate with ratings from the pleasure segment, showing the similarity of the hierarchy adopted by the two groups. However, the marks by business customers are typically lower, which may be linked to their greater experience. One interesting observation was that only 258 readers found the posted reviews useful. This stands in the sharp contrast with other websites publishing online reviews (eg. Netflix.com offering recommendations to movie viewers), where the corresponding ratios are much higher.

The second step consisted of content analysis with the use of a word mining procedures to recognize the frequently used terms associated with distinct aspects of the hospitality service. These words were then clustered into categories and checked for co-occurrence in individual reviews with positive adjectives and similar expressions. Then, the ratios of the positive impressions to the total number of comments per each hotel and each service attribute were calculated. Overall, the tone of the written reviews was strongly positive, unsurprising since this analysis pertained to the top 16 facilities listed on Tripadvisor.com. On occasion, the enthusiasm of the commentators was quite amazing when realizing that they were describing the hotel stay. This optimism corresponded with numerical scores over four on the five point scale. That hints at an interesting choice situation for the prospective customers: There are "just good" and "better" options among the highest ranked hotels.

Word mining analysis went in two directions:

• It looked at the significance of different features of the hotel experience.
• It aimed to verify the standing of top hotels based on just the summary ratings given by the reviewers.

The first track revealed an unequal ratio of positive impressions relative to the total number of comments. Across the board, location turned out to be the most frequently praised characteristic, with a 66 percent proportion. Various room aspects ranked closely behind, followed by the quality of the staff service and food. Bathroom comfort, gym, parking and hotel ambience earned far fewer compliments. If confirmed in a broader context, these results could lead to an algorithm instructing what to emphasize in hotel marketing. Already though, it seems important that a fixed factor—such as "being in the right place"—rather than created advantages, plays such a significant role. On another note, it is possible that based on yet to be determined conditions, it is easier for hotels to score accolades in some service domains than others.

Regarding the second objective, we found that the rank and score of hotels based on the percentage of positive overall evaluations varies from those measurements based on perceptions of value, which still differ from the order obtained based on specific features (room comfort, staff service). This lack of perfect consistency may not be surprising yet adds to the confusion in making sense of results.

The key question from this study is how to assist the travelers in first, providing valuable information by previous hotel customers, and second, efficiently extracting what is relevant to the (individual) readers. Clearly, combing through virtually thousands of online reviews for numerous hotels within one particular destination represents a formidable task. Therefore, it is natural for travelers to apply some shortcuts. According to the 2009 international survey, two-thirds of respondents search for information on just a few comparable hotels and then select the most suitable one to their needs. This still leaves many questions open as to the rationality of their choice. When distances between the hotels in a group (say the top 10) are minor based on an aggregate value index, one heuristic could be to treat them on par. Following such logic, secondary features would gain far more in significance.

From the user perspective, online review forums can provide much more value by offering a feature to search and re-arrange the comments by specific categories and key words. Thus, the analytical consumer will get the summary indexes for particular features or issues (for example, whether the hotel is pet-friendly), whereas the conformist interested in more qualitative stories and opinions related to the destination can quickly sift through comments in search of the emotional gist.

With such changes in place, hotels would be better equipped to fine tune their competitive communication strategies.