A multi-billion dollar question – does the Indian consumer really care about the ‘brand value’ of the four wheeler the family so desires?

Brand valuation experts Millward Brown was quick to make its claim in a report titled, “Brand-driven shareholder value creation’ which proved empirically how “Brands with greater market presence and a superior ability to convert customers from brand awareness to strong relationships significantly outperform the market, producing annual average total shareholder returns of 10% to 20% in the period 1998 to 2006. In comparison, the market on average yielded a mere 4% return to shareholders annually.” A paper by McKinsey & Company titled, ‘The New Rules of Branding’ also proves how “companies with strong brands have shareholder returns of 1.9 points more than their industries’ average.” This was doubled up by another McKinsey product titled, ‘The Power of Brand Delivery’, that interestingly put forward its proposal of an emotional connect. “Strong brands create value for shareholders by building emotional bonds with customers,” is what it claims. But who better to talk about emotional bonding and emotional attachment than the Indian consumers. It is therefore surprising then that the global automakers’ claims of great intangible brand value score low on Indian frontiers when it comes to performance in the market. Value-for-money is what the Indian middle-class consumer generally looks out for in everyday consumption, from the time she makes her choice of detergent to choosing the ‘right’ kind of four-wheeler. The Maruti 800s, the Altos, the Zens, the i10s, the Swifts, the Santros, the Indicas – these are of the ilk that made great headway into the Indian market, having sold millions of units till date. But ask an ordinary consumer what characteristic he associates with these abovementioned brands between being ‘performance-based’ and ‘goodwill-based’, and the answer would be nothing but the obvious – these are value-for-money performers and not brands which command billion dollar goodwill in the market (compare them to the BMWs, the Audis, the Mercs and the Land Rovers and you’d understand our point here)!

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Global players are not a threat to us, due to our USP of giving Indianised food”

Nishant Arora, Head Food Division, Kohinoor Foods Ltd

Do you think the coming of foreign competitors is a threat for you?
I don’t think so because our USP is ‘Indianized’ menu and we provide convenience food which requires Indian expertise and can be provided only by Indian players.

Do we miss out big on positioning?
I can’t comment on other players, but in Kohinoor Foods, our focus or positioning has been very clear. We offer hygienic and convenient Indian food, which no other players offer. Positioning is very important in any industry and this industry is no exception.

You are promoting the Kohinoor Foods brand in USA. Any bottlenecks?
When it comes to attracting Indians in the US, we didn’t have to face any bottlenecks; but when it comes to attracting non-Indian consumers, you need to focus on many things – like the hygiene condition during the preparation of food and details in packaging.

The future of the convenience food industry would be...
There would be more and more brands emerging in the Indian convenience food market and a majority of these would be from the retail companies.

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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Why Ford loves the ‘licensing‘ game in India

Ford Motor Company is one name that counts amongst the top believers in the power of brand licensing. Mark Bentley on the how, why and what of Ford’s licensing program

Licensing has played an important role in Ford Motor Company’s marketing mix for nearly 20 years now. Established in 1991, the Ford Global Brand Licensing program has grown from two dozen companies to over 350 licensees worldwide in 2009. Annual retail sales of Ford licensed products were recently projected at over $1.5 billion. Our key partners include Mattel, Fisher-Price, Aramis, Electronic Arts, Microsoft, Sony and Franklin Mint. The “3 Ps” form the foundation stone of Ford’s licensing program. In order of importance, the team focuses on the following basic rules: 1) Protect the brand; 2) Promote the brand; and 3) Produce revenues.

It is no small task to protect an iconic, 106-year-old company’s trademarks. Ford and its agency partner, The Beanstalk Group, work hard to ensure that the company’s intellectual assets are being used properly. Key trademarks such as the Ford Blue Oval, Ford Mustang, Model-T, Ford Thunderbird, Ford Racing and “Built Ford Tough” trucks are constantly monitored in the marketplace. If necessary, Ford takes additional steps through its brand protection and legal teams to settle trademark infringement matters.

Ford leverages licensing as a platform to create additional brand exposure. Licensees indirectly promote Ford brands by creating millions of additional brand impressions and consumer touch points. For example, over 150 licensed toy and videogame companies annually produce Ford products allowing consumers of all ages to experience the brand in ways that reach far beyond traditional advertising.

Consumers also indirectly advertise corporate trademarks by wearing Ford brands on their apparel. Ultimately, positive brand exposure may lead to the purchase of actual Ford cars and trucks.

Finally, licensing unlocks brand equity by allowing the company to receive a steady stream of royalty revenue. Ford creates brand value and consumer goodwill by annually spending billions in marketing and advertising. Inspirational designs and high quality products also contribute greatly to the company’s success. The licensing team is responsible for leveraging these marketing and design efforts by extending the brand into many categories including die-cast vehicles, videogames, apparel, technical publications, gifts and vehicle accessories.

Ford Global Brand Licensing plans to replicate its licensing successes far beyond its core North American market. In 2009, foundations were laid in India, China and Latin America. Although licensing is still in its infancy in many emerging markets, Ford is poised to capitalise on future global growth in the sector.

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.
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Smartphones at smart prices...

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Sony ericsson has recently launched three new slick phones namely Satio, Aino and Yari that the company is touting as “smarter phones.” It’s noteworthy that Sony Ericsson, which was at the fourth spot in the Indian handset market in 2008, had come under extreme pressure all through 2009 as it lost a considerable market share in the mid- and high-end category to Korean rivals like Samsung and LG. The growing popularity of their affordable touch screen phones were the major cause of worry for Sony Ericsson. However, now with the launch of these phones, the company plans to come back in action. Anil Sethi, President, Sony Ericsson says, “In today’s market place, the definition of a smartphone is getting increasingly fuzzy as people want their phones to enable them to do it all at the same time. And with the help of these three phones, we expect that the consumer would be able to do all and help us in writing a new chapter for Sony Ericsson in India and strengthen its position as an aspirational and an irresistible brand.” Indeed Satio, Aino and Yari come loaded with all possible features. However, the key to succeed in the Indian market lies not just in loading in features but also in getting the pricing right. Unfortunately, it seems that Sony Ericsson has not learnt the art of pricing its products as was evident in the case of its earlier flop show Xperia X1. On the other hand, Samsung (Star, Corby) and LG (Cookie, Arena) have launched pocket-friendly smart phones, which reflects in the huge sales of their offerings. If Sony Ericsson does not want to repeat history, it will have to re-look at its pricing strategy and price its smartphones smartly.

Surbhi Chawla

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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You wanna test my confidence?!

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Indo-US Civilian Nuclear Agreement
The Nuke Deal, on one hand, overturned decades of India’s nuclear apartheid, significantly enhancing India’s global brand image, and on the other, made heroes of PM Manmohan Singh & UPA Chairperson Sonia Gandhi within India, adding oodles to their political charisma and clout. Uncle Sam’s one-time exception for India to keep its nuclear weapons (without signing the Non-Proliferation Treaty), overnight gave credence to India’s positioning from a slumbering elephant to the hungry tiger. In one fell swoop, years of mutual suspicion & distrust between the world’s largest and oldest democracies were swept away. On the flip side, the deal encouraged India’s blinkered Left Front to withdraw support from the incumbent UPA government, but the UPA’s unquestionable win in the subsequent Election went a long way in underlining the positive brand aura of the Civilian Nuclear Agreement. As for our economist turned politician PM, he’s still getting used to the Yankee ‘you’re with us or against us’ ideology!

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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The movers...

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• Reliance Big Pictures, the motion pictures arm of Reliance Big Entertainment has roped in Sanjeev Lamba as its CEO. Prior to this, Lamba was the COO of Zee Motion Pictures. An industry veteran, Lamba brings with him 25 years experience in advertising, consumer products licensing, movies, video games, et al. Lamba has been previously associated with companies like Ogilvy & Mather, Walt Disney and Weinstein.

•Anil Srivatsa, ex-COO of India Today Group-owned radio, Meow FM, is all set to join Kings XI Punjab, the IPL team jointly owned by Preity Zinta and Ness Wadia as its CEO. After having started as a RJ, Srivatsa tried his hands at different verticals of television including production and management, besides DTH and IPTV. At Kings XI Punjab, Srivatsa will take control of the management of the company and revenues.

•Ending her stint with Dentsu Communications, Vijaya Sriram has joined Bates 141 as VP, Chennai branch. Sriram has an experience of 18 years and has worked with agencies like RK Swamy BBDO and JWT and handled accounts of P&G, Aircel, MRF, et al.

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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Redemption for the titans!

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Its campaign – Diwali hogi cup wali, rightfully mixes the two biggest celebrated events in the country – Diwali and cricket. The campaign includes television commercials (of varying durations), as well as strategic tie-ups with news channels, radio stations and coffee houses to reach viewers. In fact, after India crashed out early from the T20 tournament, the channel had to ensure that the value of the channel was not eroded. “The efforts went in consoling the viewer that a lot more cricket is coming up and hence we felt a serious need for aggressive marketing,” avers Dayani. When it comes to aggressive marketing, 2009 is being considered a watershed year for ESS; but as Dayani claims, ESS had not been dormant even last year.

“We made huge investments last year also. As far as investments during 2009 is concerned, the efforts are on to make the Champions League a unique property in itself,” claims Dayani. In September last year, ESS had paid $975 million for commercial rights of the T20 Champions League for 10 years – the most expensive deal in the history of the channel. But can it become as big as the IPL, especially considering that the club format has never been tried before in cricket atleast? There is a debate brewing there, but many experts opine that it will take a season or two to reach the IPL platform. “After watching tournaments like IPL and T20 World Cup, people can easily relate to the format. However, it may take some time to get familiar with the international club team format that is not known to the sport. But we are confident that it has the potential to become a unique cricket property for us,” forecasts an optimistic Dayani. While that was the sentiment about the modern shorter version of the game, surprisingly, ESS continues its bullish approach to the 50-over format as well. And this is despite the fact that the recently ended Champions Trophy (which was a 50-over format) wasn’t able to garner as high TRPs as the recently concluded T20 tournament did. Experts also believe that increasing competition from channels like SET Max (which owns rights for IPL) and Neo Sports have been a party spoiler for ESS. Then there is an added threat from BCCI, which plans to launch its captive sports channel. But Dayani chooses to differ as he notes, “Competition is always good for the industry, as it makes you proactive.” And the worries seem to fade further with ESS’ plan to launch a round-the clock sports news channel. So for now, with little differentiation in content, the only salvation for the sports channel gods is marketing, in other words, advertise shamelessly! Remember, it’s always the last over in a competitive market!

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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For Exclusive Footage by Sunday Indian Click Here

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Burning the tracks, in time!

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Then the growth story was jolted to a halt; the smooth run fast becoming a tale of the past. Reason? Although the brand won great recognition amongst youngsters, the price was found to be a significant dampener as research proved how the target group, which consisted of college students could not yet afford this brand. Added to this was its eccentric act to extend its reach from the early jobbers to executive segment. Result – a decline in annual sales by Rs.23 crore for the year ended 2003. The group needed cushion there, to ease the heartache and bounce back. A consumer research followed, which advocated how mobiles/deodorants and sunglasses were the most popular accessories in the purchase list of youngsters. The next cash cow for Fastrack was born in the form of sunglasses. The product fit the bill perfectly as there was no Indian brand presence in this category and Ray-Ban served a relatively premium segment. So as a brand extension strategy, Fastrack ventured into the sunglasses category and again with its time-honoured strategy of economical pricing, it stole the show from unbranded players in this category.

In 2005, the brand went for another repositioning exercise with a new logo. Supported by a new campaign – ‘How many do you have?’, the brand sales increased by Rs.35 crore during 2007. That was another fresh start. Through massive product proliferation & innovative pricing strategy, Fastrack succeeded in maintaining an average y-o-y growth of 30% and has thus become the fastest growing brand under the Titan umbrella in the past four years. With an annual turnover of Rs.300 crore for FY2008-09 and an annual sales of 1.5 million watches, Fastrack is mulling over plans to clock a turnover of Rs.500 crore by FY2011-12; the brand focus shifting from being just a ‘watch’ brand to an ‘accessory’ brand.

So, what is Fastrack exactly doing to facilitate this shift in brand focus? Starting from brand new launches (like bags, wallets and belts) to venturing into new areas (like sports shoes), Fastrack has big plans. “Our mission is to completely envelope the new Indian youth,” announces a beaming Simeran Bhasin, Marketing Head, Fastrack & New Brands.

For more articles, Click on IIPM Article.

Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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“We are doing a lot of BTL activities around the workshop areas.”

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It’s the approach that matters. More so, it’s all about customer interactions when it comes to becoming an auto-service bigwig. A 4Ps B&M exclusive...

4Ps B&M: Two months since you launched Carnation. What’s the distance covered?
JK: By the end of June 2009, we had started operations in nine locations. The 10th came in July. Overall, our rollout has been quite decent, though some people call it aggressive. We are planning to open another 20 workshops by the end of the current fiscal...

4Ps B&M: How has been the initial response in the country?
JK: Till date, we have serviced around 8000 vehicles but our motto is to sustain the initial response.

4Ps B&M: 8,000 alright; but then isn’t your model ‘similar’ to that of the authorised and local workshops?
JK: It’s our approach that is different. The equipment that we use is world-class, which makes us different from the neighborhood workshops. And our approach is to minimise the cost of ownership of a vehicle, i.e. we focus on repairing an accidental part rather than changing it with a new one, unlike the case with the authorised workshops. Our target is very different and we want to be as transparent as water in customer service.

4Ps B&M: What efforts are you making to ensure footfalls? Any great attractive deals for the consumers?
JK: We are doing a lot of BTL activities around the area where the workshop is located as it suits the current needs of the business and is economical too. Till the time the volume doesn’t build up and consumers aren’t aware of an Carnation experience, it’s of no use to offer them any form of deal or contract with the company.

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

For More IIPM Info, Visit below mentioned IIPM articles.

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