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| Bhupesh Bhandari: Brand them into the dust | |
| Bhupesh Bhandari / New Delhi July 31, 2009, 0:02 IST | |
 The annual Brand Derby, the results of which were published last week in The Strategist, threw up some interesting results. First, right on top amongst the 2008 brand launches were two all-Indian entries — the Indian Premier League and Nano. Second, of the 26 brands rated by the 90 respondents, 13 came from Indian-owned companies — three cars, two direct-to-home services, two films, two apparel brands, two FMCG products, one general entertainment channel and IPL. And third, seven homespun brands made it to the ranks of the 16 most successful brand launches. The lessons to be drawn are: One, Indian marketers, if they want, can build strong brands. IPL and the Nano have gained recognition the world over. Amongst the six FMCG brands in the Derby, the one that was ranked on top was Mother Dairy’s Nutrafit probiotic milk drink. Two, companies across categories have come to realise the importance of a brand in a cluttered market.
In the past, several companies built strong brands but sold them to multinational corporations when competition turned hot. Ramesh Chauhan sold his beverages brands to Coca-Cola; Amrit Vanaspati sold Uncle Chipps to PepsiCo; Kwality, Milkfood and Hamam got acquired by Hindustan Unilever. The list is long. But things seem to have taken the turn for the better now. Indians are busy building brands and multinational corporations — with their global footprint — don’t look so intimidating anymore.
For long, the global arena has remained outside the reach of Indian companies, though some of them have acquired global brands and Indian advertisers are known for their creative work. Experts say that to make a global brand from scratch can take up to 20 years. So those aspirations are still some distance away. But the worth of Indian brands seems to have gained recognition of late.
Take, for example, life insurance. Once the urban markets began to show signs of a slowdown about a year ago, most private insurers with their global partners headed for the semi-urban and rural markets. There was sufficient purchasing power and with some slick sales pitch, they thought they would be able to get good numbers. But they came across a huge obstacle in the formidable brand equity of the state-owned Life Insurance Corporation. People trust it like nothing else, they found out. The financial uncertainty has only strengthened it. In the first quarter of 2009-10, LIC has grown 20 per cent and its private rivals taken together have actually shrunk!
For that matter, look at mobile telecommunication services. There are global brands in the market place now and more are all set to join the bandwagon. But the market leader is Airtel. Two years ago, its consumer market share was 22.9 per cent and revenue market share 26.4 per cent. Now, its consumer market share stands at 24 per cent, though the revenue market share has shot up to 31.8 per cent. In spite of the stiff competition, it has moved its way up the value chain. With over 100 million customers, it has the financial muscle required to build a powerful brand.
Globally, mind you, telecom brands are considered flimsy. So much so, acquirers don’t think twice before extinguishing the brand that comes with the subscriber numbers and the network. Airtel wants to be a long-playing brand by creating an emotional connection with customers. It could well work in the long run. Airtel, by the way, was ranked as the country’s second most-admired brand after LIC in a recent survey.
Another trick that Indian brand builders seem to have hit upon is to look for categories that are unlikely to have multinational rivals. Homegrown FMCG companies like Marico, Dabur and Emami have a thriving hair oil business because the category does not feature in the product plans of most multinational corporations. Unless it can become a part of the global product portfolio, no global FMCG will give it a hard look. And hair oil is a purely Indian sub-continent product.
In fact, the same factor played a role when Dabur recently acquired Fem. The brand is best known for its bleach lotion which is used by women to camouflage their facial hair. This again is a unique issue faced by women in the Indian subcontinent. Women in the US or Europe, where multinational skin care companies are located, do not face this problem. So, these companies are left with no incentive to come up with a rival to Fem bleach lotion! Dabur has a free run.
Brand awareness runs deep amongst Indian corporations now. Take the example of Havells. Till some years back, it was another switchgear brand. Then, two years ago, the company quadrupled its ad budget from Rs 15 crore to Rs 60 crore. There was, it knew, no other mantra for survival. A Pune-based firm was engaged to redesign the logo. As a result, it has made the transition from a B2B brand to a B2C brand with a play across categories like switches, fans and lighting. So much so, the company doesn’t know what to do with the overseas brands it has acquired: Crabtree and Sylvania! The company was housed in a cramped hall in Civil Lines in Delhi not so long ago. It now operates out of a sleek six-floor glass and steel office in Noida. That reflects the mindset change.
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