Why the consumer should not be the KING in India?

An approach to building service brands in high power distance societies

Jitender Dabas
JWT India

The sudden rise of ‘bully consumers’

consumers’ in India
When was the last time you heard someone warning his mobile service provider and
threatening him about switching to another brand? Or when was the last time you
snubbed a representative from a reputed bank/ insurance company who tried selling
you one of his loans/investment products? Else, try recalling the last time you heard
someone proudly brag about the dressing down he gave to his MNC Bank/ credit
card company about the poor quality of their customer response time?

The chances are that if you are in India you would be experiencing one or more of
these things around you very frequently. And if you were an outsider you are most
definitely likely to reach a conclusion that you’re perhaps seeing the reactions of
consumers in market where they don’t have good service providers and/or the
quality of service is fast deteriorating.

Now consider the reality.

About 10 years back it used to take 15 days to 3 months to get a telephone installed
at your residence. Today it takes less than 24 hours for an active landline connection
and & you can have an active mobile phone connection almost instantly. The
approval time for a home loan has come down from months & weeks to 5-7 days.
You can apply & get a credit card almost instantly. The time required to get cash
from bank has almost come to nil thanks to the technologies like ATMs compared to
half day that it took a while back.

Now consider the brand choice equation. About 10 years back ther was one telecom
service provider, one life insurance company & not more than 4-5 big banks to
choose from. Today there are more than 5 telecom service brands ranging from the
international giants like Vodafone to homegrown biggy Airtel, Tata and Reliance to
choose from. There are more than 10-12 insurance brands almost all of them
partnered by the world leaders. There are more 20 banks to choose from – all of
them armed with latest technologies to make your life easy. From Citibank to HSBC
to Barclays to Deustche to Stanchart to ICICI to HDFC etc. etc. More than half a dozen
airlines are ready to fly you through the day between different towns.
In light of this truth the above described aggressive behaviour by consumers clearly
defies any logical deduction from reality. An even more intriguing aspect is the
consumer behaviour before all this. 10 years back the linesman from the state-
owned BSNL installed came & installed the telephone after month & a half most
consumers very happily offered him sweets. But now the same time has been cut
down to 12-24 hours but agitated consumers are chiding the hapless new service
providers for taking so long. Today our Pizzas are getting delivered in 30 minutes,
our bills are being collected from our doorsteps & the service brands are treating the
consumer as the King. Yet we’re becoming more & more foul.

Clearly we are seeing the emergence of an extremely intolerant breed of consumers

who’re forever threatening & bullying the service brands. While the choices available
to the consumers & the service standards have improved in absolute terms the
consumer’s behaviour towards the service brands has progressively deteriorated.
While due to the high degree of competition in all the service sectors the brands are
stretching themselves to ‘delight the middle class consumers’ the consumers are
treating them with increased disdain.

There seems to developing almost a inverse relation between the efforts that the
service brands are putting to delight the consumer & the consumer respect towards
the brands. As an outcome today even some of the international brands in areas like
financial services have started losing the global ‘halo’ that used to fetch them a
premium. Therefore the brands need to worry. Not just because the consumer is
getting irritated or behaving badly but their brand premium has started to get
eroded.

What explains the sudden emergence of this rude consumer

behavior towards the service brands?
Is this the REVENGE OF THE CONSUMER?
After years of being treated shabbily he’s got the choice finally & therefore he is
venting out his built up frustrations. But logic says why should he be unhappy about
getting what he wanted & more.

The second hypothesis is about the intensity of competition in the market raising the
consumer expectations every day to a level where he’s become insatiable & unhappy.

Some may also suggest that the increased brand choice across all categories has
made him a ‘spoilt child’ & hence his bully behaviour. But strangely in categories like
DTH where the choice isn’t much the consumer bad behaviour is already prevalent.

And even if one was to believe the increased choice leading to unhappiness theory,
what one can’t explain is the increasing bad-behavior or intolerance from the
consumers in a culture which is seen as more tolerant & polite. This behavior goes
against the cultural grain of the generally polite & tolerant Indian Middle class.
What has changed? The new power equation
What has changed in the last few years is that the consumer has become more
powerful because of the choices that he has today as a result of opening up of the
service sectors to the private players. But why has this led to the change in the value
system of the consumers?

The answer lies in the understanding of Indian social structure & the abilities of its
sub-parts to handle power.

A look at the social structure in the Indian society would reveal a pyramidal
construction with the power gradient being steep between levels/classes. A
structure that has existed since ages and we find that Indians are very comfortable in
this structure. And the truth about a Pyramidal structure is that in such a structure
you either look up or look down at other people. There cannot be a third way. There
cannot be a relationship of equality. In such a structure either you rule or you are
being ruled. Therefore the only relationships that the Indians have existed
comfortably in are of either superior or subordinate.

Added to it is the historical experience of the mainstream of the society of handling

power. There haven’t been too many instances in the history that the middle class
has had the power in India. Whenever a part of the middle class has acquired power,
suddenly those parts have generally displayed a change in behaviour which has
been towards becoming rude. (The Neo-rich class has at times tried to aggressively
assert its dominance in an ugly way).

This comes from the fact that by & large the mainstream Indians ( or the middle
class) are bad masters – they don’t know how to handle authority. We’ve never been
good to people below us. The ‘cast’eist nature of the Indian society reveals this fact.
We’ve never been too courteous to lower castes (who perform the menial tasks) & in
this regard most we find that people in some of the western societies are far more
courteous to the bar tender or the guy at the gate or the valet at the car park. We on
an average perform much worse.

The Power distance theory: Understanding the Indian culture

through the Hofstede’s Cultural dimensions

A more scientific understanding of this behaviour comes from the study of different
cultures by Geert Hofstede on various dimensions. The Hofstede model of five
dimensions of national cultures has analyzed & differentiated societies from 50
countries on the basis of five dimensions namely Power Distance, Uncertainty
Avoidance, Individualism, Masculinity and Long Term Orientation. One of the
dimensions on which the 50 countries were plotted & differentiated was the Power
Distance Index.

Power Distance was defined as the extent to which the less powerful members of
organizations and institutions (like the family) accept and expect that power is
distributed unequally. This represents inequality (more versus less), but defined from
below, not from above.
above The most important bit is that it suggests that in a lot of
societies the level of inequality is endorsed by the followers as much as by the
leaders. All societies are unequal, but some are more unequal than other. On the
basis of how people in different cultures willingly accept or reject these inequalities
the societies in 50 different countries have been classified as small & large power
distance societies.

Some of the characteristics of a large power distance society are :

• Power is a basic fact of society antedating good or evil: its legitimacy is

irrelevant
• Parents teach children obedience
• Older people are both respected and feared
• Teacher-centered education
• Hierarchy means existential inequality
• Subordinates expect to be told what to do
• Corruption frequent; scandals are covered up
• Income distribution in society very uneven
• Religions with a hierarchy of priests

India has Power Distance (PDI) as the highest Hofstede Dimension (among the five
dimensions) for the culture, with a ranking of 77 as compared to the world average
of 56.5. This Power Distance score for India indicates a high level of inequality of
power and wealth within the society. But what is important to understand thatthis
condition is not subverted upon the population, but rather accepted by the
population as a cultural norm. This somewhere explains the legitimized &
comfortable existence of the caste system & other hierarchical behaviors in the
society. The fact that this inequality is endorsed as much by the followers as by the
rulers explains why in spite of being a democracy the we are obsessed with one
family rule/ why we treat our cricketers as demi-gods / Why we worship our movie
stars as gods. It is almost desired by the population to have heroes whom we can put
up on the pedestals & then follow them.

This is where India completely differs from some of the western cultures like Sweden,
Austria, UK, US and Australia who have very low PDI scores less than 40 & hence are
classified as low power distance societies. Hence the relationships between entities
there are more equal & less hierarchical.
Power distance between the brands & consumers
consumers and therefore
the choice before brands
What this means is that in the low power distance societies it is possible for brands to
have the relationship of equality with the consumer. The brands can ascribe the
status of ‘King’ to the consumer & yet retain the status of equal in the hierarchy. But
not in a High Power Distance society like India & the others.

And there-in perhaps lies the reason for the problems the service brands are facing in
controlling their relationship with the consumers. As the development of the service
sectors of the economy happened first in the industrialized west, therefore the
theories of service marketing & models of service brands have taken shape in the
West in societies with lower power distance. In those markets the consumer-
centricity of the brand management slowly evolved to putting the Consumer at the
centre of everything & started treating them as the ‘king’. But since these were all
small power distance societies therefore even while treating the consumer as the
‘king’ the brands themselves didn’t have to compromise their own position since the
inequality between different social levels was never too high.

Therefore in the low power distance societies the service brands could retain the
equality in the relationship even when they treated the consumer as King. But not in
a High PDI (Power distance Index). In such cultures there can only be a hierarchical
relationship between the consumer & the brand. By the servile nature of the
business itself the service brands get disadvantaged in the relationship with
consumers in such cultures and over & above this when they follow ‘ let the
consumer be the king’ model in their demeanor they completely become
subservient to the consumer in the equation & consumer starts treating them with
the same disdain it treats any subservient entity in their culture.

This explains why as the service brands are falling over each other to please the
consumer; he is treating them with more & more contempt. Not that he dislikes
being given importance but because that’s the only way he knows to treat his
subject. Hence the increasing disdain towards brand which want to make him the
‘king’.

This also explains why the consumer was more respectful 10 years back when he
wasn’t treated too well by the state owned brands. It is very simple. Then
intentionally or otherwise the service providers kept the power with themselves &
the consumer who was comfortable with being at lower rung of power equation
gave the brands the status of the ruler & was happy to be ruled.

But as the service brands these days have ended giving all the power to the
consumers, the consumers have become rulers & have started behaving like tyrants.
In such a scenario the brands have serious challenge in front of them to retain their
premium-ness going forward.

To be respected in such a culture, the brands will need to increase their distance &
will have to assume power. If brands try to play a ‘subservient’ role in such cultures
they will not be treated well. Hence the conclusion that in India (& similar cultures
with high PDI) THE CONSUMER CANNOT BE THE KING. The brands should not
operate from “You are the king” mindset with the consumer.

The Consumer Cannot Be the King: What does it mean?

It simply means the brands need to be always at a higher level of hierarchy than
consumer if they need to protect the premium-ness. If the choice has to be made
then the brand should be the king.

In a competitive market the brands that display a servile demeanour in order to win
consumer preference will eventually end up being exploited & bullied by the
consumer.

So are there examples of brands that seem to be doing it right? Are there service
brands that behave like kings & have people following them? Well there are many
like Gymkhana club & India Habitat centre which enjoy high premium simply
because of their exclusionist positioning. The most interesting case in point is
kingfisher Airlines which seems to climbing fast on brand preference among fliers in
India. The whole experience is built almost as an invite from king to his private
kingdom to enjoy the luxury. It offers you great service but keeps itself at a higher
pedestal & doesn’t compromise its position in the whole equation. Therefore it is
very much possible to keep the consumer at the centre without having to make him
a ‘King’.

What it does not mean? What the brands should do & not do?
What needs to be understood that this is not about treating the consumer
disdainfully. It is about the equation that the brands will choose to have with the
consumers. It is about the demeanor the brand will have when it deals with the
consumer. The brands will need to provide the best of service but what they need to
avoid is becoming too eager to please the customer. Across all consumer touch
points we need to be careful about our status in the relationship. The more number
of humble telephone calls I receive from the customer service asking if I’m happy the
more I will start asserting my ruler status on the brand.
The service brands needs to be careful when they’re training their staffs in the softer
skills. They need to be told the difference between being polite & being servile.
The CEOs of top companies should not appear in a servile avataar in TVCs even if
they’re handling some delicate PR issue. I would always recommend the way Vijay
Malaya invites you aboard his flight. That looks like a ‘King’ inviting to his kingdom.
The equation with the consumer is therefore stated clearly in the very beginning.

It is also not about being niche & mass. The argument that by increasing the power
distance from your consumers you will become niche is also not correct. Infact the
brands with high power distance from their consumers will always be the bigger &
more desired brands than others. Sonia Gandhi & Shah Rukh Khan are examples of
two celebrities in India whose popularity has increased in direct proportions to their
power distance from their consumers. And in market share terms they are bigger
brands than any other in India.

After the telecom & financial services the next wave of service brands to hit the
Indian consumers are going to be in the area of retail, entertainment & food services.
As the brands like WalMart, Carrefour & Indian giants like Reliance go about creating
the next set of service brands they need to decide the nature of their relationship
with the Indian consumers. Before the make plans to rule the market they need to
decide who will rule the relationship?

Not just India but other markets as well

Indian has a PDI (Power distance Index) of 77. But then there are countries like Russia,
Romania, Mexico, Bangladesh & countries from the Arab world with PDI scores
higher than 80. The service brands will have make similar choices in those cultures as
well. There might be impact of other cultural dimensions affecting the overall
consumer behaviour in each country but I believe that brands will have to decide
which side of the power equation they want to be.

Therefore let the brand be always the KING. Or at least the consumer should never
be…

REFERENCES

1. Dimensionalizing cultures: the hofstede model in context ( 2006)) Geert hofstede,

universities of Maastricht and Tilburg, the Netherlands/ www.ac.wwu.edu/~culture/hofstede.htm