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Dipak Jain, Dean of Insead on Metrics for measuring marketing effectiveness

Tuesday 28 February, 2012

1st a few stories from Dipak: His father was a founder of India Airlines. He was told by his doctoral advisor that there was no future in math, so he arranged by professional courtesy, a few interviews @ Northwestern University’s Kellogg School of Management. When asked in these interviews why they should hire a math wizard, his response was “it’s the future of marketing,” & he was hired. The 1980’s were big in marketing, with the advent of bar codes & buyer behavior @ points of purchase being captured in databases, which allowed marketing to segments of 1. He brought an analytical approach to marketing, creating marketing science. He was the 1st person of Indian descent to become the dean of an American business school, & in Europe too. He was told that he crossed a line of intimacy when he hugged a board member, & now is greeted with 3 hugs & a kiss on the cheek by the same. He became dean of Kellogg on 11 Sept., 2001, a day in infamy. Following that day, job offers for Kellogg students vanished, so Dipak wrote letters to Kellogg alumni who graduated prior to 1995 to ask them to consider hiring Kellogg grads. Within 2 weeks he had 54 offers for his students. His explanation was simply that people like to be asked.

India shines in parents’ commitment to education. Marketing is not a functional discipline, rather a philosophy of how to look @ problems. Not all can be measured, but what can be measured can be managed. Gillette counts the number of strokes it takes to shave in the morning for the Mach, 2, 3, 4. In 2003 he was invited to Thailand to brand the country & his compensation was a trip to Thailand, which he took in 2004 when the tsunami hit. Business schools have evolved their focus & those who dominate over the last centuries: 19th-colonies by countries, 20th-capitalism by companies, 21st-human capital by citizens. B-schools are in the best position today because they get the best people.

Market forces are at work. Our nanosecond culture leaves us with no time to be proactive. The airline industry needs to realize it’s competition is video conferencing because it increases productivity. Hyper competition reduces the customer cost of thinking. Airlines should stop selling tickets & start selling miles. Business model innovation will come from emerging markets. Lawyers are starting to charge for their power rather than by the hour & share in their client’s returns. In the 1990’s, Microsoft, Intel, & Cisco ruled. Since 2000, Apple, Google, & until recently RIM ruled with meaningful differentiation. Commoditization only leads to price competition, while differentiation takes a more holistic approach. World demographics are becoming bi-polar: the West is growing much older, while India is getting younger, which leads to changes in target markets such as customer wellness, health, & wealth-care.

Value requires effectiveness & impact:

  • Meaningful value creation means getting close to the customer before the competition does
  • Value capture means getting the right price to do business the way the customer wants to do it
  • Sustaining value means you’re capable of attracting & keeping customers.

Including opportunity costs & lost wages, a US MBA costs $350K, so shorter programs have value. The 2nd ½ of the 2nd year is a problem if students find jobs before they graduate.
Metrics must be meaningful to the customer. Redefine the space to think beyond success to significance & beyond corporate social responsibility to individual social responsibility.

Open Q&A

  • To address price-sensitive Indian customers, educate to demonstrate & deliver more value. For example, discount airlines are growing.
  • US B-schools are ranked highest because they invest in R&D, encourage giving, which results in large endowments. Indian schools are tuition driven, but can grow by encouraging a culture of giving. Indians already give to their temples.
  • These days, boards are focused on innovation. They’re not only ruled by ROI-Toyota has evaluated the Lexus over 20 years.
  • “A person in the world can be the world to a person.”

Dipak spoke @ the SP Jain Institute of Management & Research Marketing Conclave.

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