The importance of understanding your customer

Recently I came across a CNBC video that was uploaded on LinkedIn on how Starbucks had failed in Australia. I found the headline a bit baffling and hence I watched the entire video. What I understood from the video baffled me further – the reason why Starbucks had failed and had to close down 70% of its outlets was because of its inability to understand the Aussie consumer. They did not make any effort to adapt and tried to thrust down their standard coffee retail format in Australia. Isn’t understanding your consumer the starting block for any business? And what caused this to discombobulate me was that the culprit was a global behemoth like Starbucks. Was it sheer hubris that led to the error or is the Aussie from another planet? I reckon it must be the former.

This brings me to the core topic of this blog which is the importance of understanding your customer and the effort required to do so. I would like to share two instances where I had to roll up my sleeves and put myself literally in the shoes of the customer in order to understand what he needed and to ensure we adapted to those needs – In the first example it was to develop a product and the second example was to offer a service. This blog covers my first experience in gathering detailed consumer insights which led to the development of a product that successfully met the needs of the user.

This was at the start of my career in early 1996 and is very close to my heart for the obvious reason. I was part of the product management team at Ceat tyres and was responsible for the passenger car segment which was then considered to be the more glamorous of the segments within the dull yet high profile tyre industry. Ceat in those days played second fiddle to MRF tyres who with a larger advertising and marketing budget were the undisputed number 1 brand in India. Ceat had its moments of glory in the passenger car segment but here too MRF had started snipping at our back and we were losing market share. I was tasked to explore the phenomenal success MRF had with a tyre they had manufactured to cater to the specific needs of a niche vehicle called “Chakda”. Now those who have been to Rajkot or any other place in Saurashtra will need no introduction to the quintessential public transport of that region called Chakda. But for the others here is a brief description and some pictures to reinforce your imagination. Chakda for me is the style icon of the Indian vehicle industry.

What is a Chakda? It is a hybrid between an old Royal Enfield Bullet motorbike and a cart which is used for everything from transporting people to harvested crops. The multi-purpose vehicles are especially popular in the region of Saurashtra, where there are estimated to be over 125,000 of them. However, with Gujarat’s population roughly equal to that of Italy, its inhabitants share one Chakda between 80. And, as there is little reliable public transport in the regions, overloaded Chakdas dominate as the most efficient form of transport. Chakdas are expected to last over 15 years. Build your own (as demonstrated in the diagram below) and you could be earning Rupees 500-800 a day.

As you can see from the images, the load borne by the Chakda is enormous. The front tyre used was that used on a motorcycle but the cart (which is the rear load bearing part of the vehicle) was fitted with Premier Padmini tyres. Now a Padmini or a Fiat car as it was popularly known until its demise at the end of the last century carried a family of 4 or max 6 and hence the tyres could manage the weight. But the Chakda as you can see carried almost an entire village. While MRF had reinforced their Fiat tyre with additional plies and made it stronger, Ceat had not given much importance to this segment and were supplying the regular Fiat tyre. Note here the lack of adaptability to the consumer’s need. As a result none of these tyres survived the abuse and burst during use. Owners of Chakda stopped buying Ceat tyres and the field was open to MRF to capture a dominant share of this segment. As a result the overall perception of the Ceat brand took a massive beating which started affecting Ceat’s two wheeler sales as well. Rajkot was a regional office for Ceat and the regional head was having a nightmare. Two wheeler sales were fairly large in that region and the failure of the Chakda tyre was causing other tyre segments to suffer, including the highly profitable truck tyre segment. Hence the revival of the Chakda tyre was critical to the survival of the Rajkot office.

The moment I landed in Rajkot, I straight away went about chatting with the Chakda owners who considered themselves no less than a James Bond in their own right. Most of them especially the younger ones styled themselves to resemble a Bollywood star, some may have attempted to copy a Hollywood star as well. They took pride in their vehicle which was not only their bread, butter and jam and a source of livelihood for them and their family but more importantly the Chakda mirrored their own style statement. They could demand a higher dowry and a prettier wife depending on how gaudily, robustly and creatively they had painted their Chakda. So it literally was a matter of life, love and death. There was an emotional connect with the Chakda, more like a love affair. I spent around 3 days riding the vehicle, meeting Chaka owners, drivers, association leaders, tyre dealers and our sales staff to understand how we could make up for the folly we had committed. While strengthening the tyre by adding a couple more plies and a different rubber mix was the easier task, a much more insurmountable task was to re-convince the Chakda owner to fit Ceat tyres instead of MRF. This is where talking to the owners, drivers and understanding their emotional connect with Chakda helped me arrive with a simple yet key differentiator. Chakda the vehicle was more beloved to the owner than his wife or his family. Hence we had to offer them a product which reinforced this belief. My suggestion was that we emboss the image of the Chakda on the side wall of the newly reinforced tyre. The owner could colour the embossed image on the tyre or could just flaunt it as it was. This was meant to resolve two key issues – one was to convey that the tyre was made specifically and solely keeping the requirements of the overloaded Chakda in mind. The tyre for the Fiat car was the regular non reinforced tyre which we continued to fit in the Fiat Padmini. But for the Chakda we developed a new tyre. Secondly it allowed Ceat to differentiate with MRF cosmetically as well since MRF’s Chakda tyre did not have any such embossments. Strength wise we could not differentiate hence the Chakda image on the tyre could do the trick. The next task was to brief the factory team and get them to agree to this move and implement the plan as quickly as possible. Fortunately they agreed immediately and we set about launching the new reinforced tyre with the Chakda logo. The initial trials were very encouraging and we gradually were able to capture a fair share of the Chakda tyre market. MRF with its strong overall perception and performance continued to be the dominant player but the Ceat Chakda tyre captured a significant share of the ever increasing market in Saurashtra. This brought smile to the faces of the dealers as well as they could charge a premium while selling the tyre. More importantly the Rajkot regional office started to gain traction across all other category of tyres.

Consumer insights does not always need a detailed and expensive market research. But spending time with the user, understanding his or her habits, usage, attitude and perception is critical. Given that I was looking at a niche and I did not anticipate any dilution during my interaction, I preferred to get my information directly via one on one contact. It was effective and low cost. Having said this, Qualitative and Quantitative research are key tools that many organizations tend to ignore and consider as a waste of resource. My advice as a marketer is that to do so would be at a huge cost and with long term repercussions. Nowadays I understand that Chakda as a passenger transport vehicle has been banned or operates under stringent safety guidelines and the rear tyres are no longer the Padmini Fiat tyres but are the Mahindra jeep tyres. No reasons for guessing why.

In my next blog, I will cover the other story where I spent 3 days sitting in a truck, travelling from Mumbai to Kota, understanding what a truck driver goes through during his typical work route, what facilities does he encounter during this time and the hardships, inconveniences and humiliation he faces- which I experienced myself and which helped me conceptualize a full service truck stop with shower, food and entertainment.