 Can you give him a bigger round of applause? Thank you. You know, I'm not doing my keynote because you want to keep to our time and also get to utilize Mr. Tyagarajan's presence to the maximum. This is the 24th year of Exchange for Media. This is the 21st year of Pitch. We've been doing the Pitch CMO Summit for 18 years. This used to be called the Pitch brainstorm in the Indonesian days. And it's growing from strength to strength. Marketing is business and business is marketing. Brands are the core of connecting with consumers. And our theme today is customer centricity. What are we doing to be able to be customer centric? What are we doing to be able to endear ourselves as brands to our consumers to our customers? And we couldn't have had a better person than Mr. Tyagarajan to be able to do this conversation. Today, the brands or businesses, I shouldn't be calling them businesses, but institutions that are connecting with their TGs, I would say politicians are among the top most. They know how to set the narratives. They know how to be experiential with their audiences. They know how to look at data. And that's what makes them customer centric. Also, will we be able to be learned from political parties, politicians, leaders? We can learn from anyone. Also, what is happening is the aspirations in India are growing. But does it really mean that the way brands engage with the current audiences, current TG, and prospective audience has seen some change using technology? Also, what is happening in the macro environment? So let me start by asking Mr. Tyagarajan to make his opening comments and then I'll ask him questions. Mr. Tyagarajan, what's changed in the last summer? This is peak season for you. This is festival time for you. You're in the air conditioning business. And because of the way you interact with all the industries, all the sectors, there are also customers who have an understanding of what's happening at a macro level. So give us some macros which are currently in the play as we speak. Good morning, Dr. Bhattra. Good morning, everyone. First of all, thank you for inviting me. Congratulations to Exchange for Media Group. And congratulations also on the occasion of the latest pitch Madison report. It has kept its place. There is no single document where you can get everything about ADEX. And in a very bold manner also forecasting what it is and to be reviewing it at the end of the year. So, compliments to Madison team, compliments to your team. And this you said that a bright mind. No, there are many bright minds here throughout the day. You will see and I won't be there in the evening and I know how hot it becomes in the evening. The big change in the marketplace, I think is not only for blue stuff, many others is the growth is driven by aspirational middle class. There are reports that premium products are gaining traction, that is in a small percentage, the base of that is small and you are seeing that. But otherwise I think the future is going to be driven by middle class. Future growth is going to come from tier 3, 4, 5. Bottom of the pyramid. That's right. I think India is a very large market and very complex market. You can't have one single strategy to drive. And according to me, marketing a product, even in the United States, may be a simpler one compared with marketing in India. It may be expensive there but it requires a different market. It's a different marketing mix and I think much, we grew with the concept of four piece of marketing. I think there must be a correction. You can't quarrel with Philip Kotler for that but I think D comes in four piece plus a D. Even in P, I have something else which I will tell you. That also has undergone a change in terms of distribution. India's data. Correct. Absolutely. I think it is driven by that. And Mr. Thakraj, when we were preparing for the session, you were telling Satya Prabhakar, I don't know where is Satya, that you know Satya is there. He is the founder of Suleika. He is now doing a new marketing services company. You talked about how a store in a certain location is very different than a store, a retail store for your business or someone's business. And you need to understand the customer in that particular store. So a customer in a store in Hyderabad is different than a customer in a store in Meerut. And you were saying that's where the data comes into play. Give us a story from your own business where you've seen this happening. Yeah. So I should not be mistaken that I am sounding arrogant or so. My complaint has been that the marketeers are predominantly located in or the CMOs are located in Mumbai or Delhi. And most of them, I don't think they are traveling to the smaller markets, Tyre 3, 4, 5 towns. I think the world has dramatically changed. Like in Bluestar, so or Daikin, you can check with the LG, 65% of the sale is coming from Tyre 3, 4, 5 markets. And there are big changes. Like more than 50% of the air conditioners are bought through consumer finance. And more than 90% are fast-time buyers and who are buying entry-level products. And I think we need much more data and much more connect. So this is one part of it, understanding that consumer. And this is an exciting period, especially for air conditioning companies. And so will be certain FMCG products like ice creams, for example, that we deal with ice cream companies. They are excited about the summer season. They are preparing for, and in their case with the elections, ice cream consumption also will be high. Cold drinks, ice cream. Ice cream, cold drinks, one more thing. Correct. And ice cream indirectly benefits us. That's our context. Now, in this exciting period, I call it like a Diwali for cooling companies or Diwali for ice cream companies. While many of us, you know, there are multiple things happen like it is a summer vacation. And people go on vacation holidays to different places. Some summer related big movies also get released, both in connected TV and in Bollywood and other regions. IPL, election, many things are happening. And so in this big event, any big event, competitiveness goes up. That's why when it is World Cup, all teams, even Afghanistan will raise their level. So here you can see, all the brands will raise their level in terms of advertising, in terms of new products, in terms of distribution. And in terms of communication, fresh communication for the season. Quite rightly. And in that intense competitive environment, you have to play. So if Virat is preparing for, blue star is preparing for the battle and Daikin is here, Daikin will prepare for LG will prepare for all. Now, here it is not only communication. It is about the relationship and the customer centricity as a subject comes from what that I should know what the customer needs. And we have flopped many times with the products and features which the customer was not expecting at all, you build it. And that need from those markets will have to come through extensive research. I am not very sure that the spendings on research is good enough by the industry at all. You are doing some focus group discussions and all that. You need to be much more micro in that. So the micro marketing is very important. And equally important is the fact that the relationship relationship with even your channel partners and you should be knowing each one of them. And in including the data that comes like what I was telling there is I should be able to track in Musafarnagar in a particular showroom. What is that sale and what is my share out of that? Or some Anarkudi in Tamil Nadu or Belgam somewhere all places. I should be able to track it real time. That data is important today. I do not think that just by advertising in some IPL I am going to get my sale going. And we know the others of the last year in the same submit we discussed the ad expense itself what percentage is being spent on creating brands and how much is for tactical or performance marketing. There is a big skew that you look at the ads how many are and how many new brands have got created. They are reaping out of something that has been created long ago. Mr. Thakurin at this point let me ask you if your customer centric you know your data, you know your consumer, you know the micro trains. Do you think being customer centric in a price conscious market because whether it's air conditioning whether it's any product category the Indian consumer especially at the entry level and in you know non metro is very price sensitive. Do you think being customer centric can get more money from an Indian consumer? Can you charge more? Can you increase your margins? Or that doesn't happen. There are two benefits. If I am customer centric I know what price he is expecting. So therefore you are able to develop a product at that particular price point and depending on the region today depending on the customer segment your business case for developing a product you need the data. So if you are only customer centric you will know at what price point I am supposed to be developing a product what feature I am supposed to be. Like for example I will tell you in a deep freezer. I am sorry for bringing in blue star. The customer attaches value for number of things. Aesthetics of chess freezer, baskets inside, cooling efficiency. If the power goes how long the ice cream will not melt. There is a cast wheel for movement of that particular one. There is handle. Number of things are there. Now in a data science you will try to understand what is the value he is attaching for what. Now we used to be thinking that the aesthetics is very important. We used to be spending a lot of money on that aspect but forget about the reliability of those wheels which has to last for him for five years. Actually he expects you to put more money and make that wheel much more robust or he is worried about the handle because every day some 200 times he is opening and closing. That led to you design a deep freezer without a handle in the inside it is inbuilt there as a part of the lid. So this inside will come only by being customer centric. You have to understand he has got a cone inside he has got a brick he has got a cup and what are those sizes that are coming for various ice cream brands. Therefore how I have to design the basket that is a customer inside comes through customer centricity. Now the problem is that when see Indian market is now it is driven by scale and an unimagined scale like huge numbers are happening to it is happening due with the digital. So there is a smart aspect it is happening with the sustainability angle in this complex world you need to collect massive amount of data. So if you have now got at what price point he wants now I know his mind then I will be able to price it in such a manner to make more profits otherwise I will be losing money. Beautiful. Now one of the points you said you know FMCG companies consumer durable companies a lot of CMOs started in sales. I went to a business school 30 years back a lot of my batch much started in sales and some have become CEOs some of them are entrepreneurs. You made this point that CMOs don't spend enough time in market especially they may have spent it in their initial years but as they go up the ladder and they become you know CXO CMOs the amount of time they spend in terms of observing it first and making market visits going to you know hinterland so to say going to the some of the cities you mentioned do you think a combination of looking at the data of sales point of sales looking at category data and also these visits a combination of it can lead to consumer insights which will lead to new products can lead to new features can lead to new pricing can lead to new way of communicating do you think that is the need of the hour. Entirely agree with you but equally I'm saying I should not generalize say say for example Suresh Narayan he spends a lot of time in there will be many exceptions there where even CEO spend time there the the the importance of spending time that is that is one part of it if you are spending time what is that you are able to grasp how that data can be collated and 360 degree view of the market now that can come that can come only through a data sign there is Swaminathan here is a master I should not be lecturing many of them will be here so the the thing is it is increasingly clear that you need real-time data on consumer insights across now you look at the other thing which has changed that's what I was telling Girish the you know some point of time YouTube became a search engine like you can go to Google and do that you can go to YouTube and do that equally it is competing in that space now e-commerce is invariably used to in any any purchase e-commerce people are going and searching and understanding that and before coming to it is a very important element now you should be you should be you a particular category may not sell significantly in e-commerce but still e-commerce is important and we don't know what when DC search online by offline so at least comparison of the features price happens online so it's very important Philip Kotlin model will not include this okay I am he's a guru but still what I'm saying is it has changed since then and so the whatever you get and how do you that physically it is impossible in a huge country like this you can't be spending every day in the market but it is going to come through a data warehouse and analytics and artificial intelligence it is here and if you miss the bus you're going to miss the market share now we are in the IPL season we are in the election season there are two biggest events that can happen in any year and they're both happening in the next two months you talk in your opening comments about the fact that you know one has to be smart and intelligent and differentiate it in the way you spend your marketing money you reach his hair your new commercial we'll see that but do you think IPL is overpriced with the amount of I mean it is out of reach for some people and with the two brands coming together I'm not taking the name of the brands so that nobody can legally sue me well not that I'm worried I have lots of loyal friends the prices will only go up because if they have to recover their money in the next five years all the marketers in this room will have to pay two three times whether there is ROI or not that's a separate question okay so do you think it's smart to spend I know you have a new commercial for you it's summertime you say it's early time so to say but do you think IPL is becoming out of the reach of a lot of brands the pricing is really really out of whack in my view I don't think so dr. what I I think it'll it'll double within another three years same IPL if you compare with international standards say India is still cheaper in terms of marketing cost that's that's not the real issue the issue is connected with the fragmentation of IPL or the reach through IPL there is standard definition high definition connected to digital and what do you do with this you cannot address this country with just one and we do some calculations and take a bit so therefore I am not so much worried about the cost and I am certain this cost will go up of course it will it'll it'll double and but but the fragmentation again find the data science there has improved so much of data is available in order to measure and and understand where you have to put your money the the concern I will have will be our assumption that all are sitting and watching your ad fully I am not very sure the attention span of today's consumer how do you capture under you unless until you have got some 2000 crores to be going on bombarding it okay now there are many CMOs in the room some I know some I have met for the first time business leaders you know what is your advice to CMOs if they want to become CEOs the CMO tenure used to be 60 months couple of years back it came down to 48 months now the average CMO tenure is between 36 to 38 months depending on whatever data you want to look at so how do you think CMOs can rise to the role of a CEO what are your what is your advice to them beyond traveling to mayra 10 was up for Naga in in in all forums I keep saying that one will have to continuous continue to learn and upgrade that is first part of it but most importantly I think it is the it is the connect with the customer it it it links back to the customer centricity the successful CEOs are the ones who are connected more to the customers at the end of the day you may think they are a blue-eyed boy of somebody and connected well to the board or the chairman I think eventually the bottom line will be who is connected to the customer and in India that's other point that I mentioned that even with the channels I don't think your clinical relationship is going it is very important that much beyond transaction clinical relationship you have to develop that relationship with the channel partners with the ecosystem yeah my last question before I bring in the audience for two three questions is let me take the example of drones let me take the example of space tech the government is not a policy creator but it also a market maker for example the government said you make drones we'll buy 8000 crores of drones during corona when the vaccines came the government roped players like yours and other players to be able to build the supply chain from a you know refrigeration so that the vaccines are in the right form when they reach the end use so how do you think the government can play the role of a market maker over the next few months it's pending in infrastructure that's one way to be a market maker look at the amount of infrastructure projects though there's also a theory whenever there are elections more infrastructure projects coming I leave why what I'm trying to say to everyone's imagination and I'm sure so the the perception of government will have to change much more it is changing it has to look more than 3.5 lakh crore of transaction in the gem portal it will be a very leading digital commerce e-commerce platform it has it is breaking record every month the number of transactions that are taking place but still it is not seen as Amazon Flipkart and all nowhere near the transactions that are happening there but but the government has played I can tell you from the point of view of the air conditioning industry PLI one can say there were criticisms that you are going and industry has to fund for themselves why are you going and giving some kind of funding like this which is viability gap or something like this but the government through DPIT made the Indian air conditioning industry realized this that you are all importing more than 50 percent from China India is the fastest growing market with India's penetration at some seven eight percent it is going to grow by 2040 to 45 most probably definitely by 2047 India will overtake China in terms of market size if that is so why you should not think big so I think what they taught us was to think big that you can be a global player in air conditioning industry and that change is is I take it as a market maker absolutely it was not thought about by the industry industry was still because you know the margin you see also and then India the profit margins are lower compared with the many international markets cost of capital is high you can somebody's happening rain is happening which I call it like a Satya Jitre movie we were going through this tragedy all along to tell us that look you should come out of this you can be quite often very aggressively that is a big benefit like a market maker so today Indian industry can say proudly that we can make products equivalent to that of anyone else in the world we can supply products to Europe and US and we can lead the sustainability movement global warming or anything thank you you're absolutely right one thing I've seen because of the policies of this government because of the successes of Indian entrepreneur the ambition of an Indian entrepreneur at every scale whether the first time you know midsize entrepreneur to an existing large enterprise the ambition of the Internet entrepreneur in the last three four years has become bigger and bigger and he or she is trying to make a mark globally please give Mr. Tagarajan a big round of applause and we can take one or two questions you can think of your questions but I want to ask my team to play the blue star AV and I'll get out of the way so that I can also watch it because I'm not watching it and you all can watch it and we can have one or two questions for Mr. Tagarajan can we get the blue star AV plate? Garmi myself Garmi himself himself myself Virat himself blue star heavy duty blue star heavy duty is Bhayankar Garmi's holiday and fast cooling inverter AC now Garmi's holiday how did you like it? I love it who are you? Mr. and Mrs. Garmi we are Garmi's holiday we will celebrate here sit down will you have some cold? why not blue star fast cooling inverter AC now Garmi's holiday well done Girish and Mr. Tagarajan we have another 3-4 minutes before we let Mr. Tagarajan go any questions for Mr. Tagarajan good morning sir I just met you I'm from your competition can you hear me now sir come closer to you please my question is on a larger level since there is a lot of innovation artificial intelligence things happening and a lot of technology changing a lot of industries so do you see the disruption in terms of new players or technology changing the air conditioning industries in next couple of years? most certainly I suppose and if you are talking about within the product I think first to begin with from the commercial spaces in the residential still Indian market will look for entry level products I don't think they can afford that like we have found when you say it is Wi-Fi we don't have homes which keep the Wi-Fi on 24 hours right when we leave we may switch off and come so I don't think residential but commercial space definitely is okay but in terms of artificial intelligence the kind of consumer personalization any technology company coming and really taking the consumers already I see quite a few experts here in marketing sales distribution many models are already implemented I think FMCG has taken a lead some consumer durables would have done it air conditioning industry is generally slow I think we have to move faster thank you