Another few millions on their Integrated Marketing Campaigns, for the sake of building brand equities.

As far as forecasts are concerned, they certainly seem bright with SIAM further claiming that despite the cyclical changes in the industry and economy as a whole, production figures for the passenger vehicle segment have appreciated (CAGR) by a stunning 15.6% during the past five years, to touch 1.22 million units in 2008-09. So while on one hand, we have a great growth story being written down in terms of domestic production and consumption, on the other, we have the much honoured Indian auto brands going places, our exports having grown at a CAGR of 30% in the past seven years, crossing 331,500 units during 2009 alone. But there’s the rub: no Indian auto brand has been featured amongst those most valued by either Millward Brown or Interbrand/BusinessWeek. Does this mean that names like Maruti Suzuki India Ltd. or Tata Motors, that are relatively unrecognised when it comes to brand value amidst global names, have nothing to worry about when it comes to brand-related payoffs? Strangely, even though the Indian auto brands are having a roll in a market, which according to the International Yearbook of Industrial Statistics 2008 released by United Nations Industrial Development Organisation (UNIDO), is ranked 12th in the list of the world’s top 15 automakers, various global researches across sectors strongly prove how brand value does matter when it comes to shareholder wealth and other financial implications. Prof. Natalya Delcoure of the College of Business Administration of the Sam Houston State University proved through her paper titled, ‘Corporate branding and shareholders’ wealth’ how “Corporations that own superior brands exhibit higher profitability and create shareholders’ wealth independent of economic downturns.” Using statistical analysis, she proved how, “Strong brands appear to have lower market risk and deliver greater returns to shareholders compared to the relevant benchmark.” Another empirical work by Professors Thomas Madden, Frank Fehle & Susan Fournier of Harvard Business School titled, Brands Matter: An Empirical investigation, testifies how “strong-brand portfolios significantly outperformed the market.” Their calculations showed how while the portfolio of strong brands “yielded an average monthly return of 1.98%, during the same time period, the benchmark portfolio on average returned 1.34% per month while the one-month Treasury bill returned 0.42% per month.” Further on, a 2001 Ernst & Young study claimed how “corporate reputation accounted for upwards of 30% of a company’s stock price.” A study by JPMorgan (in association with Interbrand) concluded that “on average, brands account for more than one-third of shareholder value. Brands create significant value either as consumer or corporate brands or as a combination of both.” Various other studies by academicians from Harvard and the University of South California, published in the book titled ‘Brands and Branding’, indicate that “companies with strong brands outperform the market in respect of several indices. It has also been shown that a portfolio weighted by the brand values of the Best Global Brands performs significantly better than Morgan Stanley’s MSCI index and the American-focussed S&P 500 index.”

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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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In 2010, there would be five new global brands entering India!

Viraj Bahl, former owner of Fun Foods

What potential do you see in the Indian convenience food market?
The potential is huge as convenience foods occupy the majority of the Indian retail market. This is what is motivating foreign players to enter into the Indian market. In 2010, there would be at least five new global brands.

Wouldn’t it be a threat for Indian cos?
Foreign players already existed in the Indian market and the competition for Indian players was always tough. But it’s necessary that either you enter into a category where no other players are present or you enter into a category where you create a proper positioning.

‘Create a proper positioning’? How?
It’s necessary that you have a USP, which is based on a proper utility function. We always wanted Fun Foods to be a one-stop-brand for food.

In the convenience food segment, which is the most lucrative space?
‘Ready to cook’ is the most lucrative space as the Indian market is not mature enough for the ‘ready to eat’ category. On the contrary, ‘ready to cook’ makes cooking much more convenient for today’s consumers; and hence it’s an easier way to attract consumers.

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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 King was called BRAND.

I think that every brand today is waking up to the new realities in this fast-changing world. Today’s competitive world asks for desperate measures. Local knowledge and quick responses are the need of the day. Gone are the days when one would apply the same formula of communication everywhere. People today differ by fraction and change by second. Aspirations change. Loyalties change. The need is to adapt quickly, talk to them in their own language but never waste a second. Because every moment you waste is going to cost. And the cost is your future.

Multinationals have one advantage. They are big. But that is their disadvantage too. They are too big to be flexible, and too big to understand the need for it. They come with a set format and style of working and with a lot of red tape (although many would debate it). They take time to react.

And that is where we are making a difference! The need is there for a free-thinking, independent and flexible communication services provider who understands and adapts quickly to the fast changing needs of the brand. It’s the age of information technology and several new mediums are in the offing. We have been offering new age solutions targeting the audience of today, in their language and at their speed. And if I may say so, quite successfully.

The change is there in the attitude and approach of the clients today. They have realized the importance of independent thinking. The dynamism, the chaos and the spark needed in this otherwise product parity market can only come from breaking away from the obvious. It has to come from someone who is ready to take a challenge; someone who is ready to take a chance. And companies like us are doing our best to provide that free-spirited fervor, adapting ourselves for the consumers, and hence clients, of today.

The fight with the multinationals is actually not there. Because brands – both big and small – today have understood the benefits of dynamic, independent, quick and flexible communication agencies, who are ready to change and who are ready to adapt. It’s quite natural that Darwin’s theory of adaptation would work everywhere. Right?

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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Is this it?

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If numbers were any indicator, then certainly the aura of the king of pops, Michael Jackson just refuses to die. The 112-minute film, This Is It (documentary shot out of Jackson’s rehearsals for his comeback concert) has exceeded expectations; the sales figure of $101 million worldwide in the very first week is simply mind-boggling with fans packing theatres across borders. However, released in India on October 28 in at least 150 theatres (as a strategic move to combat Aladin & London Dreams), the movie has not replicated its global success in home market. Ticket sales though encouraging have not been as expected with estimates suggesting only 2,000 tickets sold initially. Blame it on the online ticket sales for the predicament, but given that Indian moviegoers still prefer counter sales, Sony Pictures Entertainment can expect the sales number to surge.

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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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R. K. LAXMAN MATTERS...

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Aam Aadmi (Common Man)
For more than five decades, the celebrated cartoonist has immortalised the common man in a manner no political party or personality has been able to do. Sure, all parties and brands profess deep love and concern for the common man. But again, in what can only be termed as a political and marketing masterstroke, United Progressive Alliance (UPA) Chairperson, Sonia Gandhi and Prime Minister, Manmohan Singh have actually convinced a majority of Indian voters that the Congress is genuinely concerned about the welfare of the aam aadmi – the person who actually (and always!) votes during elections in the forlorn hope that things will change for better. Sure, towering Congress leaders like Indira Gandhi did try to fuse the Congress with the aam aadmi with catchy slogans like Garibi Hatao. But it is this dispensation that has actually walked the talk with numerous schemes that actually work to make life a little better for the poor in India.

If intention was half the work done, the latest Congress government has already done wonders for the aam aadmi. But then, this is the government and in reality, things like inflation, corruption, terror and poor infrastructure still rankle a lot of Indians. The real marketing coup, however, for both Gandhi and Singh is that the political Indian consumer (voter) very well knows that the product she is getting right now is still not great; she is still happy because the supplier is trying damn hard!

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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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Destination Europe

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They say, “a lot can happen over a coffee” and it seems that they really mean it. After pleasing the taste buds of Indian coffee lovers, the home grown coffee major Café Coffee Day (CCD – from the stable of Amalgamated Bean Company Ltd.) is all set to entice coffee aficionados in the European market. With an aim to attain revenue of $1 billon by 2015, the Rs.750 crore chain is planning to roll out 50 stores in Europe and Middle East by the end of this fiscal. In fact, CCD plans to open as many as 12 stores in Prague, the capital of Czech Republic. But the real question is – How will this mass coffee brand from India establish itself in a continent where premium players like illy, Starbucks, et al, are present? Is the rich legacy of Indian coffee enough to entice them? “We already have been exporting to these countries, so we are aware about the market. But we know that it will take us time to capture the market and as such we are not expecting profit from day one,” avers Alok Gupta, Director, CCD. Further, as a part of its global strategy, the company has already unleashed a new premium brand – Coffee Day Square. The 2,500 sq. ft. gigantic lounge offers ‘single-origin’ coffee. In fact, the group is cashing in on such positioning to cajole the global customer. Who knows the charm of ‘single-origin’ coffee could work for them!

Angshuman Paul

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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ESPN Star Sports is betting big on its agressive marketing strategies. But will the payback be worth the pain?

Pawan Chabra bowls hard at the re-branded batsmen...

First came the change in logo. Then a change in programming happened. And now, after much ado about re-branding, ESPN Star Sports (ESS) has set the Indian towns bustling with its marketing acts, as Nirmal Dayani, Senior Director – Marketing, ESPN India puts it, “ESPN Star Sports has undergone a lot more than just rebranding, as we not only changed our logo, but the programming and graphics as well. So now, when the consumer is looking at a whole new channel, we are undertaking 360-degree marketing tasks.” An on-field evaluation also clearly suggests how the company has come up with aggressive media campaigns, for its long line-up of tournaments – the erstwhile Champions Trophy 2009, Champions league 2009, Formula One Grand Prix, Barclays Premier League et al. Media experts suggest that the company has sidelined a massive Rs.100 crore for its media strategy. So while on one end you’d expect to run into ESS hoardings and billboards, being hit by witty radio jockey dialogues and gazing at the 30-second flicks on the idiot-box, on the other, the truth is that the capital earmarked is not simply for pure advertising purposes. Even Dayani confirms that as he avers, “A larger chunk of the planned media investment will be used for developing the Champions League format, as it is relatively new for the viewer and will take some time to gain momentum.” So there goes the tale – a fresh new sports channel, with fresh content and logo. But there’s the rub, a fundamental question mark rather – was rebranding even required in the first place?

An aggressive Dayani shoots back: “There is always a scope for improvement and the ‘new look’ channel will definitely offer some new experience to the Indian consumers...” He also quickly doubles up and mentions that “If Tiger Woods can reinvent his swing after winning so many tournaments, there is ample scope for the channel to improve too.” More importantly, the company has chosen the busiest of periods to rebrand itself. Of course, while timing it during the onset of a season filled with tournaments – which, of course attract guaranteed footfalls, eyeballs, sportstars and most importantly brands – is ideal, the festive season will make it a more fruitful investment as Manu Sawhney, Managing Director, ESS asserts, “With so many exciting sports properties currently being broadcasted on our channels, the new branding for ESS and the refreshed on-air presentations for the brand will enthuse and exhilarate sports fans and continue our strong and enduring association with them.” Surely, sports is a visual spectacle and ESS’ on-air packages aim to enhance this experience by communicating in the well-synchronised, dynamic and energetic language of sports, while the channel brands promise to reach viewers across all demographies.

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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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After leveraging the Titan brand equity for long, Fastrack is taking its first baby steps into the accessory market.

Angshuman Paul gives an account of the ‘watch maker’ turned ‘accessory giant’, for whom time was once running out real fast...

“We would be soon launching jewellery, helmets and footwear… We want to evolve as a ‘complete’ accessory brand that envelops the youth and we are trying to rise above the ‘serious’ brand image of Titan,” announces Ronnie Talati, VP & Business Head, Fastrack & New Brands, while discussing the current and future plans for building the Fastrack brand in the country.

Surprising though that today Fastrack wants to grow as an independent superbrand, while when we all believed that Fastrack lay snugly in the lap of the Titan brand! And this independent vision is not just when it comes to the future of the brand, for even physically the fact is more than just evident. Walk into the Titan Head Office, on the sixth-floor of the Golden Enclave Tower in Bangalore and notice the manner in which the floor is divided into two separate departments - on the right, sits the Titan team, while on the left it’s the young and enthusiastic Fastrack team. So there’s the question – why a separate brand now? Truth is, it has always been isolated, unlike what many perceived it to be. Fastrack was always positioned in a manner so as to benefit from the huge brand equity of Titan, yet remain a flagship purple cow on a standalone basis. It was born after Titan ended its joint-venture with US based Timex, a decade back. Therefore to fill up the lacunae of a cool, trendy and sporty product, the Tatas created Fastrack.

From its early days, the positioning of Fastrack was made clear – it was meant for the ‘early jobbers’ & young college goers. Therefore, the price was kept comparatively lower than Titan products. “We wanted a different brand and it had to be very trendy and sporty; that’s what Fastrack was meant to be,” avers a time-conscious Talati of Fastrack. Easy on the pocket pricing, with a slogan like ‘Cool Watches from Titan’ and brand ambassadors like Narain Karthikeyan, Fastrack started beckoning young consumers, who were otherwise being drawn by its competitor, Timex.

Ten years since it hit market shelves, Titan has actually emerged as a brand which doesn’t need the brand name of the Tatas anymore. Cashing in on the brand legacy of Titan and tying-up with MTV helped Fastrack gain a speedy start from year one, grossing Rs.15 crore during FY1998. And that was just the start of a high-growth story. “By FY2001, the brand had grown by more than 20% y-o-y, and had collected Rs.25 crore in revenue by then,” announces Talati.

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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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So is it all a tale of making the most of the first mover advantage terminology? Perhaps not. For till date, there have been quite a few that have taken a plunge in this ‘seeming’ blue-ocean. MyTVS from the TVS Group’s stable, Mahindra FirstChoice (a joint venture between ICICI Bank and Mahindra & Mahindra) and Mukesh Ambani’s Reliance AutoZone are names that represent similar formats that were launched much earlier. So what is so unique about Khattar’s model? One word - scale! All the other aforementioned names missed out on achieving nationwide presence and were therefore just restricted to a particular geographical region. For example MyTVS operates in about 5 southern states while Reliance AutoZone operates in just three metros. So, what comes first for Khattar – offering diversified services or increasing reach? Khattar is targeting more states before he provides varied services through Carnation.

When it comes to generating a decent initial response, the company has been involved in quite a number of Below-The-Line activities, than opt for high-priced media vehicles like TVCs or print campaigns, as Khattar explains, “Being a start-up, we chose mediums that were suitable for the needs of the business rather than making expensive choices...” Talking about diversifying its service offerings, Carnation also recently announced the launch of its first used car sales facility at Mumbai, which was in the pilot stage for the past two months. So there you are – three businesses already; how many more on Khattar’s mind, remains the question.

Carnation has of late also ventured into the insurance business, and its operation includes renewal of expiring insurance policies. “We have just started with the insurance business and as the number of locations increase, the vertical will gradually build up,” added Khattar. Apart from this, the company also has plans of starting an in-house accessory and spare parts brand. When asked about the revenue targets, Deepak Singhal, Group CFO, Carnation avers, “We are targeting revenues of Rs.75 crore for FY2010...” He also revealed that Carnation “expects to break even by Q3, FY2010-11.” However Khattar is not very optimistic about the break-even coming soon as he opines, “When you expand at such a speed, being a start-up, the break even point automatically gets stretched.” Yes, he is no oblivious to competitive threats [“You will see a lot more players entering this arena going forward,” he remarks], but looks like the company which has already raised Rs.108 crore from investors like Azim Premji (Rs.70 crore) and IFCI Ventures (Rs.28 crore), and is planning to raise an additional Rs.170 crore primarily by way of debt funding from banks is in for a big surprise to competitors. Well, if investment plans are anything to go by, Khattar surely has his hands on the wheel. Yes, risk there is, but can you name a successful entrepreneur who never treads the double-edged path of risk and return? Khattar is no novice, and his Carnation is set to re-write the rules of the auto-service industry!

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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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