Brands need to help each other to grow: PepsiCo's Shivakumar

D Shivakumar who recently took on the role of Chairman & CEO, India region, PepsiCo was invited as key speaker at the IAA Retrospect Prospects event held in Mumbai. At this event he spoke on ‘Looking back – Going ahead’ stressing on the  highs and lows of marketing, media and advertising in 2013 and what he envisages  for the communication fraternity in 2014.

The who’s who of the industry present at this event looked forward to listening to the speaker known for his ‘fighter’s instinct’.  At the onset of his talk he reminisced about his early days in Mumbai and paid tribute to the metro which has taught him a lot and how the city and the people he met here have helped him grow in his career.

Speaking about the key turn of events in 2013 he said that the emerging markets which are solely responsible for the major source of revenue for MNCs saw a slow down and devalued the currency. With rising private equity companies coming up, the concept of the public company was becoming outdated.

Sharing about the future of the GDP growth Shivakumar said the expected growth in the US is believed to be 2.5 per cent and 5.7 percent in Asia. "This is the first time since 2008 that all the regions are showing positive growth, the biggest being the US. In fact, for the first time in 15 years, USA will add more to its GDP growth than 

In his view a CEO’s tenure in India  has reduced  to five years in comparison to the US where  40 %  CEOs do not last beyond two years and moreover 50 % businesses  in Asia are family owned  compared to countries in the west.

Referring to the power of social media he opined that it could make or break a brand. To prove his point five of the most liked and disliked ads were shown which generated social conversation. In this regard he stated, "Social conversation is rich. We say consumer is the King. And today, the King has a voice and if it's not favourable, you are dead," Also, women and issues about women will be on advertising centre stage in future, he predicted.

He foresees a conflict between independent growth and dependent growth among agencies as well as brands. Citing the example of the telecom industry he said that telecom would not be what it is today if not for the collaboration between Airtel and Nokia or Vodafone with Samsung. In his view, innovation and the company’s quick response to its customer is of crucial importance in the industry today.

According to Shivakumar, year 2013 defined the digital space. “The smart phone which gives the power of internet in every person’s hand has opened up the whole world of opportunities for them. It has empowered women and youth,” he said.  With the number of people using smart phones overtaking those using the fixed internet, globally, he urges marketers to shift their media strategies.  In this scenario he estimates that the world media industry will spend  $505 billion in year 2014.
Political parties in India will be seen spending around 1000 crore on advertising which is 2.5 times higher than what was spent five years ago.  In 2014 the digital medium will gain precedence and a shift in the way money will be spent by parties will be evident since the first time voters estimated to be around 160 million are active on social media.

Focusing on the television space, he believes that regional markets have an important role to play since regional languages have helped augment the number of channels existing today and the same can be said of print as well.  Television as a medium has helped to discover hidden talent in the country and has an appreciable potential. Hence the decision taken by PepsiCo to collaborate with MTV to launch a new channel which will provide a platform for budding talent.

In his opinion social media gains predominance especially when brands depend on celebrities. They also need to help each other to be noticed on the various social media platforms. 

Concluding his talk Shivakumar stressed on six concerns which need to be addressed: a shift from the penetration route to focusing on consumption economy and the infrastructure required to address the consumers' "wants" today. Having strong partners and understanding and delivering brand value in service industry, and also the need to look at different business models and technology, innovation, speed in execution, choosing celebrity brand ambassadors on the basis of facts, and integration of agencies (creative, media, digital and brand).

In a gist we can sum up D Shivakumar’s message for the industry. He strongly believes that the need of the hour is brands which will help each other grow as well as benefit the industry as a whole.

Following is the presentation given by D. Shivakumar at “IAA Retrospect and Prospects” on the 12th February 2014: