At the recent annual World Economic Forum, Davos, the redoubtable Bill Gates spoke of “creative capitalism”—an approach where governments, businesses, and nonprofits work together to stretch the reach of market forces so that more people can make a profit, or gain recognition, doing work that eases the world's inequities. There is an increasing recognition and acceptance of this new and more complex definition of business. And at a different level, it could be the harbinger of a new way of building sustainable brands and corporations.
Unilever group has a tool called ‘Brand Imprint’ that essentially requires the company to qualify and quantify the impact that its brands have – emotionally, socially, physically, spiritually, intellectually and environmentally. It’s like a tool to figure out if there is a holistic contribution towards bettering of the communities being served. This recognition is not based on a sense of charity alone, it could actually mean reaching out to a new market that was largely untapped, but has much potential. More often than not, market forces fail to make an impact in many segments not because there's no demand, or because money is lacking, but because not enough time, effort and resources, are spent studying the needs and limits of those markets.
True, in the current scenario, this may sound like one of those management principles, which has a place in the CEO speeches, union budgets and marketing books only, but, at a deeper level and if practiced genuinely, it could actually be the way forward for many sagging brands’ future and fortunes, as it could show a new market with untapped demand.
That there’s wealth at the bottom of the pyramid, nobody doubts, and it has been brought to the fore by C K Prahalad in his bestselling ‘The Fortune at the Bottom of the Pyramid’. Companies are recognising the needs of that largely unserved market and its consumers, and looking at serving it innovatively. Innovation could take many forms, from the model of co-operative and inclusive growth that is followed by companies like Amul or SEWA, to Hindustan Unilever’s Project Shakti, which is a unique programme that provides micro-enterprise opportunity to rural women in remote villages, making them entrepreneurs and in the process increasing the company’s rural reach phenomenally. Or it could be distribution and packaging-led innovations like Hindustan Petroleum’s low-cost rural pumps called “Hamara Pump”, to the pastes and shampoos being sold in smaller amounts in sachets, both for value and convenience.
What Dr Mohammad Yunus has done with the Grameen Bank in Bangladesh and elsewhere, is a classic case and a successful way of doing banking with the bottom of the pyramid, with an entirely different model. His innovative way of doing banking for this stratum of society and yet managing to remain profitable, keeping the default-rates minimal, has been feted globally, even fetching him the Nobel Prize. Since then, many others have taken the cue. The importance of microfinance and the strategies adopted by many banks such as Citigroup, ICICI, HSBC and Barclays, among others, to reach the remote masses, is a case in point. As Gary Hoffman, vice chairman, Barclays Bank Plc, UK, addressing a CII-forum said, “Developing responsible business is not about philanthropy but an opportunity for the financial industry, the government and the social sector to meet the needs of the masses together.”
Bottomlines are no more uni-dimensional and financial alone. Increasingly, the CEOs of corporations are talking a new language of growth that is inclusive, marketing that is reaching out to various levels and bottomlines that are taking into account all the stakeholders. The power of technology and specifically, internet, has made it imperative for companies to think like corporations and act responsibly, by doing business in a manner that recognises the role of the various stakeholders of the business, and not of shareholders alone.
Convergence is no longer a media and entertainment-restricted phenomenon, but is having far-reaching and long-lasting ramifications on businesses and the way they are conducted across categories. Companies can no longer afford to assume their market being the one which they might be serving at that given time, for technically the world is the market, if not direct then as an indirect consumer base of tomorrow, if not today. For instance, Wal-Mart is grappling with the image-beating that the brand has taken, owing to its business practices in certain markets, and the impact felt is global. Today brands are seen as good or bad, responsible or irresponsible, irrespective of the geographies and the markets.
Finally, marketing and brand-building is about having a good image and the recognition as a responsible corporate, and tangible profits may not always be possible or be the prime motive when business tries to serve the very poor. The benefit in such cases is often intangible and non-quantifiable in nature, but it’s of immense value and long-lasting. This recognition enhances a company's reputation, makes a case for the company and its brands by appealing to customers and ultimately, makes the company seen as a responsible corporation. And that would be the biggest benefit of the creative capitalism, or whatever name this new way of doing business could be addressed by.