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| Kanika Datta: Global brands, local 'terms of trade' | | The value for companies whose brands become local default names can be huge |
| Kanika Datta / New Delhi Apr 16, 2009, 00:28 IST |
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Brands as widely differing as Maggi, Volvo, Hawai chappal and Dettol, have one thing in common for all Indians from aam admi to crorepati. All these multinational brands are also local generic names for their product groups.
Yet strangely, none of the multinationals that spent crores of rupees on promoting these brands has ever chosen to leverage this invaluable advantage. Maggi Instant Noodles, which is celebrating its 25th anniversary, is a case in point. It is the default word for instant noodles. So much so that, advertised with such variations as “maghi”, “meggi” and “magi”, it has become staple fare in dhabas, as any BPO staffer hoping to catch a late-night snack will confirm.
True, the version served up on rickety dhaba trestles has a passing resemblance to the slickly-packaged original. The local variation has liberal additions of many spices and is, to my mind, much closer to Maggi’s original promise of “fast to cook and good to eat”.
Though Nestle didn’t do (as far as I know) any targeted hard-selling among dhaba-owners, the popularity of the brand-name in India’s most frequented eateries is certainly a compliment to Nestle’s positioning and pricing strategy when it was launched 25 years ago.
Back then, instant noodles had about as much chance of success as a wild card entry winning Wimbledon. Several attempts by other companies had failed, including one by Lipton, which was then a separate company under the Unilever umbrella.
In the late seventies, instant noodles was among Lipton’s many attempts to diversify from its core business of selling packaged tea (a cornflakes brand Bingo! and a tea drink called 21 were others). Lipton’s instant noodle offering was called Supermum, but it failed mainly because of its positioning. In a consumer market in which eating habits were conservative, Supermum was marketed as a replacement to the primary food in an Indian meal: rice and roti.
Contrast this with what Nestle did with Maggi in 1984. Instead of trying to insinuate it into the main Indian meal as a cereal substitute, Nestle chose the utility route, positioning the product as a snack for children. By doing so, Nestle addressed a key concern of the average middle class Indian housewife and making it a major hit with this most important segment of consumers. The positioning has proved so durable that Nestle hasn’t changed it significantly in a quarter century, though competition is inevitably eating into its market share.
Brands like Maggi and Dettol (generic for any antiseptic) have been around long enough for them to have become part of the Indian lexicon. Volvo, on the other hand, was launched in the nineties. Yet, the Swedish company’s brand-name took far less time to become a generic for luxury bus services— even if the bus in question is not a Volvo. Like Maggi, the brand and its supra-luxury offering appeared a dubious proposition when it entered. Bus services were (and are) heavily subsidised by state governments and, therefore, ridiculously cheap and, therefore, spectacularly uncomfortable. Would there be enough consumers willing to pay premiums to travel in extra luxury? Volvo doesn’t put out separate numbers for India, so it is not clear whether sales have translated into profits, but the way it went about selling its product to transport companies made the brand-name part of the Indian lexicon. Obviously, this strange Swedish name stands for a set of values in the Indian bus traveller’s mind. Perhaps it has to do with the fact that it raised the bar on luxury bus services to an altogether new level. Who knows.
In fact, this local co-option of global brand-names is an entirely serendipitous development and difficult to explain. Why should Hawai Chappals— which Bata sold to a Brazilian company last year— become generic for the humble rubber slippers that Indians wear at home? Size— the turnover of the company, its retail spread and so on— must account for only part of the explanation. Market domination might explain another part and first-mover advantage another.
Yet mobile phone companies fulfill all these criteria but none of the many large brand names have become generics for mobile services. Then again, neither have Coke and Pepsi, both highly visible giants with strenuous multi-crore marketing plans, become default terms for cold drinks. Thanda is still the term for carbonated beverages in the major markets of north India, a proposition Coke once attempted to co-opt with its Thanda matlab Coca Cola campaign. Whatever the explanation, the value for companies whose brands become local default names can be huge. It also suggests that the science of marketing can be unpredictable.
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