A word for the Multinational FMCG Companies - Tap local wisdom - learn quick, cut costs, make higher profits

“Lets strive for excellence on a foundation backed with Truth, push ourselves to the limits but not at the expense of our goals, compromised for higher profits and an excuse for creating shareholder value.” - Ajay Chaturvedi


The illusion, matrix, indrajaal created by advertisers

As we bask in the glory of a handful of Olympic medals from a country of 1.3 Billion, secured with the sheer grit, determination and sweat of the men and women who strove against all odds, its hard not to think of the brands that are scrambling to sign up these sports persons as their brand ambassadors now.

Isn’t it surprising though that none of these sports people have come up and claimed energy drinks or milk nutrition & taste enhancers as “the secrets of their energy”? Almost all are pure bred, fed on the most natural diets, ghee, milk, butter and the naturally available grains.

There is a popular Youtube channel where the host goes around interviewing and speaking with the local wrestlers and body builders and almost all of them claim to drink few litres of cow milk, natural diets and workout at the farms. Few talk about supplements but none so far has claimed any energy drinks as the one that made them taller, stronger and sharper either.

Which brings one to think hard. So much spent in advertisements and marketing. Has it yielded anything that they claim or just repeated conditioning of the urban masses, that yield reducing profits over time?

Baseless Efforts, Wasted Opportunities

Kellogg might be the latest brand to have succumbed to this, but it goes back to the even when the Romans first adapted their originally conceived 10 month calendar to the 12 month Vedic luni-solar calendar. The luni-solar calendar is still fervently followed in large swathes of the country.  Kentucky Fried Chicken - KFC first came into the Indian market in the 1980s and spent millions in marketing, trying to educate the customers about the benefits (noetic) about the products only to finally end up launching a vegetarian burger. The only country in the world where KFC sells vegetarian burgers. Same goes with McDonalds, after their popularly relished Big Mac, they had to launch a Maharaja Burger with a vegetarian patty.

Kellogg launched its product in India in 1994 with initial offerings of cornflakes, Basmati rice flakes and wheat flakes. Though they entered the Indian market with a quality product with a huge technical, managerial and financial backing, it failed miserably to make a blow in Indian market. In 2020 they launched Kellogg “Upma”. Colgate runs with the same story, after having demonised all the local dental solutions, only to have finally launched Colgate “Vedshakti”.

One study done at Harvard in 2019 by a certain German scholar claimed that coconut oil is pure poison. These kinds of studies might have worked in the pre-social media world. Now you sneeze and people from across the globe are more likely to bless you than your own neighbours. Even with that, this particular study was ludicrous to say the least. Even the common people could see through it. A raw material and derived products that have been used across the whole of Asia, from cooking, cleaning, skin care, fuel and more usages for millennia, this study had become a laughing stock. It was withdrawn finally and had little impact. Thousands or maybe millions of dollars down the drain, and still ZERO learning.

Where is the box that you’re trying to think out of?

The few questions that beg to be answered that will act as tocsins are these: Why was no learning adopted in the launch strategies, from the existing case studies? Why did the learning take so long, in some cases, upwards of four decades, some even centuries? So much marketing capital invested. These companies are also known to hire the brightest and the smartest from the top most B-schools. These smart young Management Trainees end up doing well in their limited boxes, rising up the corporate ladders, carrying with them, that limited idea, which is no more than 5% of the country, with them and finally hit a wall of realisation that, the path they are on, is far from being sustainable, it is suicidal for the brand. The founders at KFN are products of the same system to this comes from experience. Hiring smart doesn't get one the local wisdom. To tap into the local wisdom, one needs to understand the local philosophy and the local culture and customs for that one needs to be able to understand how a society understands and follows. Indian society for one, which is based and founded on Vedic principles, follows that profound understanding fervently. A Maha Shivratri is a far larger festival than a Valentine’s Day. The idea is to grow business while managing costs, to increase profitability. Why spend so much on advertising for decades when it has to finally spring back to the same place where they started to compete with it.

The Sustainability Problem

The final adoption of an already existing product or service after decades of trying to change the consumer, is the beginning of yet another deluge of problems. The problems of standardisation and universalism in a market that thrives on diversity and tohubohu. It is important to note whats chaos for an insect is order for the spider. While samosas might be relished throughout the country, the varieties available across the length and breadth of the country is staggering. A large number of Indians have Upma for breakfast, but a Malayali Upma is quite different from a Tamilian one which is different from a Maharashtrian and so on. This need for standardisation and universalism makes these players negotiate more on the procurement front, owing to the scale they want to tap, backed with a marketing muscle for selling a supposedly higher quality product at a premium price. This ends up pricing out the local producers from the market and the local suppliers of raw materials are limited to just these players. The bubble bursts when the consumers start seeing through the rhetoric and false promises. By that time the damage is done and all stakeholders lose, including the MNC players. We are currently witnessing this with the primary supply chains completely destroyed.

Carving the right peg for the hole

No product in this space has increased in size, decreased in price and increased in quality for any period one can think of. Most of these companies are trying to shrink their way to greatness. Satchetizing of products is the norm where nothing in the market suggests that, that is what should be followed for a larger customer base.

True sign of success for a product or service is that it gets better, bigger or cheaper, at least one of the three or all, with time. This is the only industry where all three have deteriorated to a point of no return. It is complete chaos, with people blame games and there is no hope on the horizon for any new comers learning to start ahead of the curve either.

Meanwhile the local producers are doing just fine, working on rebuilding the post-covid primary supply chains. In this situation, we feel one of things to do is to lay out a clear roadmap for the newcomers or outsiders to get a head start, by learning about the local philosophical systems that drive culture based on the ideas of Time, and prove Rudyard Kipling wrong after all - East is East, and West is West, and never the twain shall meet - maybe they can, over a coffee at Kullhad Economy.

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