To do or not to do

The strategy of power branding, the art of identifying and backing a few strong products in a company's portfolio, has not always worked well with companies.

Take the case of fast moving consumer goods (FMCG) major, Hindustan Unilever (HUL), for instance. The fall in market share that the company witnessed in the last few years has been attributed to its focus on power brands — products such as Fair & Lovely, Lifebuoy, Lux, Surf, Rin, Wheel and Pond’s — most of which contribute over Rs 1,000 crore in terms of its turnover.

Due to its focus on these star products, the company was seen vacating its position in the regional space, leaving the space wide open for rivals to fill.

The result: HUL has had to redraw its strategy, bringing its focus right back on regional brands by relaunching soap brands Rexona and Hamam in the south, and Breeze in the north. HUL had also launched Ruby Tea in the south, even as discount tea brand Brooke Bond Sehatmand was launched earlier this year.

The thinking, say experts, is clear — be local. The thought was summed up well by none other than Unilever’s chief executive officer Paul Polman, who was on a three-day visit to India in March this year. In response to a media query on power brands during a select press meet at HUL’s new headquarters in Mumbai, he had said: “There is no power brand in my view. All our power brands.”

HUL may have practically abandoned its famed power brand strategy, which it first implemented in mid-2000. Other big FMCG companies, however, are doing otherwise.

For instance, Tata Tea, rechristened Tata Global Beverages, is embarking on it now with three key brands — Tetley, Good Earth and Himalayan — indicating three verticals where it would like to play in the future. This includes tea, coffee and water respectively.

Even as it draws up its august list, flagship Tata Tea and Eight O’Clock Coffee, strong brands in the portfolio have been left out. Percy Siganporia, deputy CEO of Tata Global Beverages, believes “Tata Tea and Eight O’Clock Coffee are managed as regional brands for now. But they can make it to the list in the future”.
 

Company

Power brands

% of revenue

BritanniaGood Day, Marie, Milk Bikkis, Tiger, Nutrichoice, 
Treat, Britannia 50:50over 90 CadburyCadbury Dairy Milk, Five Star, Perk, Eclairs, Gems
Celebrations, Bournville, Halls, Bubbaloo, Bournvitaover 90 HULFair & Lovely, Lifebuoy, Lux, Surf, Wheel, Rin, Sunsilk,
Dove, Ponds, Lakme, Knorr, Kissan, Brooke Bond, 
Lipton, Kwality Walls70 Tata TeaTetley, Good Earth, Himalayan60

As Tata Tea sharpens its focus, companies such as Cadbury’s and Britannia are seeing their power brands — which contribute over 90 per cent to their turnover — work for them in the marketplace.

Britannia, for instance, has seven power brands in its portfolio. Vinita Bali, MD of Britannia Industries says: “All (seven) of them are rock solid products with a clear positioning. So if Good Day defines a cookie experience, Milk Bikkis is about the goodness of milk in biscuits, Tiger is an alternative in the glucose market, while NutriChoice is our foray into creating healthier options for consumers in biscuits. Treat, on the other hand, is an indulgent product, Marie is a staple, while Britannia 50:50 is salty-sweet product. How many companies in the biscuit segment can boast of a portfolio like this?”

In his book, Brand Warfare: Ten Rules for Building the Killer Brand, author David F. D’Alessandro states: “A strong brand is the only thing that can tip the balance of power between distributors and a manufacturer back into the manufacturer’s favour.” Prafulla Agnihotri, professor of marketing at IIM-Calcutta, concurs: “It is about backing a few strong products in your portfolio, keeping it top of mind at all times. They become your power brands.”