The Brand Vs The Product

Four corporate leaders discuss which is more important

Shripad Nadkarni
Vice president "" marketing,
Coca-Cola India

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BOTH

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It can never be a question of "either-or" "" you need to have a strong product core for any brand. And a brand cannot sustain itself over the long term if the product core is weak. I'm not talking only in terms of purely functional brands but also of image brands. Here are some examples to illustrate this:

Strong brand + Strong product
THUMS UP: It has a unique strong taste, which is distinct from the other cola brands. And that is what has given us the licence to really own masculinity, positioning Thums Up as a macho brand. The key is that you need to refresh the brand by tracking the contemporary expression of masculinity.

But what is not evident is the need to refresh the product. You might choose not to tinker with the taste but you need to understand what the consumer's expression of strong taste is. Similarly, Hindustan Lever's soap brand Lux has a strong equity as a brand but product innovation has also been a continuous process for Lux.

Strong brand + Weak product
COLGATE: It is one of the strongest brands in India. But some years ago, Colgate-Palmolive stopped innovating in the product area, hoping that the brand's equity would pull the company through.

Meanwhile, Hindustan Lever's Close-Up brand came out with a gel variant, a unique format that was innovative and contemporary. As a result, Close-Up took away a significant share from Colgate. Pepsodent took up the performance platform. Colgate came out with Total and Strong Teeth variants only much later.

Ideally, Colgate should have taken the lead in innovating. An important post script is that when Colgate finally responded by improving their product profile, it did get back some lost share.

CAREFREE: Johnson & Johnson's (J&J's) Carefree was the strongest brand in the sanitary napkins category for a long time. This was a category that was both strongly functional and emotional.

But when Carefree did not innovate, it lost share and image leadership to Procter & Gamble's Whisper, a completely new brand in a market dominated by Carefree, but it gained share on the basis of a superior product benefit offer. J&J then launched Stayfree Secure at the value-end to create a new consumer segment and regain share.

Strong product + Weak brand
ARIEL: It had the potential of becoming a big brand as it had demonstrated outstanding product performance. After a great start, however, the brand fell off the line. P&G couldn't build a big brand out of a great product.

There are three benefits strong brands offer: First, brands that bond have a distinct competitive advantage. This is because they fulfill specific roles in consumers' lives and become an integral part of their lives that makes them difficult to dislodge.

Even if a competitor comes up with a better product, the benefit of doubt will always be given to the brand that is the most strongly bonded. As a result, the stronger brand gets the advantage of time to rectify the product core.

Second, strong brands are efficient for the company as you don't need to spend as much as the weaker brands. Strong brands also give you a platform to expand into related categories.

Ultimately, the task of business is to continuously innovate on the product front and consistently build brand equity. After all, strong brands equal strong shares and profits.

A final watch-out for companies is the area of consumer promotions where they hope to draw from the equity of the brand. It can be dangerous if it does not feed into the brand's equity.

For example, theme commercials for brands have a particular look and feel and communicate a particular story. The same brand, for promotion, acquires a different look. Take soaps, for instance.

The promotions for soap brands are completely different from the brand's core footprint "" for instance, gold-coin-in-a-soap kind of promotion. So what you are doing is actually weakening the equity of your brand over time.

To summarise, strong brands are brands that have a strong emotional connect with their consumers and are built on a constantly evolving product core.

Atul Sobti
Senior vice president "" marketing and sales,
Hero Honda Motors Ltd

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PRODUCT

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A debate on product vs brand works more in the FMCG sector where the emotional pull works a little more than the rational pull. But in sectors like automobiles, a rational pull and the product itself are more important. The product becomes more important with consumers looking at factors like fuel efficiency, power, price and styling.

With bikes, we believe that there are several psychographic sets. Hero Honda gives an assurance about the product and the bike brand may be the least important thing. Look at our CD Dawn, for instance.

The name doesn't conjure up any fancy images but the fact that it is from Hero Honda makes it one of the top motorcycle models in India and caters to the value-for-money kind of consumer.

Then there are Passion and Passion Plus. They are for the consumer who is image-conscious. Here it's the brand that matters to him. Thus, the importance of product or brand depends on the category of the product. It's all about different products here, rather than the brand. Also, with the automobile sector, word-of-mouth is phenomenally important.

Then, in the process of catering to the image-conscious consumer who says, "Give me something that looks different", Passion was becoming its own victim. Since everyone had it, the novelty of a different product wore off.

So, we changed the styling and made it Passion Plus. Passion was initially selling 40,000 bikes a month, which came down to 10,000. But after launching the Passion Plus, it was up to 40,000-plus again.

But there is the "contemporary" consumer too, for whom technology is a plus. The new Honda City is a case in point. It is for the "contemporary" consumer who will buy it for its improved technology.

And the fact that it costs Rs 1 lakh less than the older Honda City makes it a good buy for those to whom value for money matters. So, Honda, in one sweep, has answered the need for both kinds of consumers.

But at times, very good products come out as number two or three. A case in point is Modi Xerox, where I worked. Back then, the Canon copier was equally good, if not better than Modi copiers. But the marketing for Modi Xerox was so effective that it came to be known for its service.

The consumers should have questioned, "Why does a good copy machine need a lot of service?" Because the product may not be very good. On the other hand, you could make Canon work like a horse. But the marketing for Modi took away a lot of rational thinking and the brand-building worked.

I also find in India, an attitude that a change for the sake of change is mandatory. That's very dangerous. We should look at the common man. If we keep him in mind, we will all realise that dipstick surveys and demographic surveys matter little. Perhaps a consumer does not want five new products each year and all he wants is that you deliver what you promise.

Ravi Jain
Vice chairman and managing director,
Millennium Alcobev

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BRAND

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Products have no meaning: one tube stuffed with tobacco looks and tastes pretty much like any other and an amber bottle of beer looks and tastes like any other. A product is made in a factory while a brand is bought by a consumer. A product can be copied by a competitor, a brand is unique.

Globally, it has been said that in the early 1980s, 95 per cent of the market capitalisation of a company was book value and 5 per cent was non-tangible. Today, 75 per cent of a company's market capitalisation is non-tangible and 25 per cent is book value. A brand is now the most valuable asset a company owns.

Product parity: Most cars now have comfort features like power-steering, and safety features like air bags. However, the challenge lies in selling the brand essence to the consumer, which was done successfully by Ford Ikon.

Selling the brand essence: Offering the same brand values to a wide spectrum of consumers is the challenge. For example, in the late 1990s when the mid-size car segment boomed, Ford Ikon offered the "Josh Machine" experience to an entire span of consumers with various models such as the EXI, ZXI and SXI during launch and now with Nxt and Flair. For the consumer, Ford Ikon = Josh = a peppy driving car experience.

Creating a distinct positioning: In 2000, when Zingaro, a strong beer, was launched by Millennium Alcobev, a distinct platform in terms of product and positioning was necessary to create a niche in a market with established players. The name conjured up exotic images, and the communication platform took on the light-hearted, strong beer platform effectively.

Brand is a matter of pride and a simplifier of consumer choice. Today's consumers are very demanding, knowledgeable and have high aspirations and the ability to exercise choice. Brands that reflect consumer values and attitudes will get the maximum share of heart and wallet.

Our industry is a classic example of the brand being king. Our brands are not about providing different benefits, but are about lifestyle statements.

Brands are larger than products, but they are not built out of thin air. Quality perceptions are also changing. Ten years ago, we invested Rs 5 crore to build a brand.

Today, we have to invest Rs 100 crore for the same. Interestingly, this is at a time when consolidation has occured in the industry and the number of brands has gone down.

V Chandramouli
Vice president, sales, marketing and service,
Mirc Electronics

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PRODUCT

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The schooling of most marketing professionals in India has been on FMCG. These categories essentially focus on communication as the principal, and often the only lever for brand-building. These are categories where product innovation is often restricted to some minor changes.

But now durables and services are becoming the lead marketers. Durables as a category has expanded beyond the traditional home appliances to include mobile phones, automobiles and so on. In most of these categories it is products that are the principal lever of brand-building.

The root of this difference lies in the purchase process in these categories. There are two distinguishing elements in the durables purchase process that result in this huge importance for the product.

First, durables purchase is based on a consideration set of two to three brands from where selection happens based on physically checking the product out. Second, word-of-mouth plays a huge role in brand selection in these categories. Let us examine this in detail.

Let us first look at the process of shopping in durables. The consumer enters the shop with at least two to three brands in his mind and does a detailed evaluation of the products of these brands.

In several cases, the evaluation is a live one as in televisions where the product is evaluated in a working condition, or in auto where the test drive performs a similar role. The product takes over in this stage as the consumer evaluates aspects like performance, styling and features.

A perfect product with acceptable advertising often scores over an average product with great advertising at this stage. This is what makes it possible for a rank newcomer like Skoda Octavia to enter the market, have minimal advertising and yet do reasonable volumes, quite obviously because the product scores in the test drive stage.

This also results in consumers upgrading in the shop, from low-cost, basic TVs to models with superior sound like KY Thunder because it impacted them in the shop, never mind that it costs 50 per cent more.

Let's turn our attention to word-of-mouth "" a key factor in brand selection. Durables and the like represent a high-ticket purchase for the average consumer. Hence, the concept of "trial" does not exist here.

The consumer has to make a safe choice for which he often depends on his social circle. Several brands in the durables space have been built entirely on word-of-mouth, for example, IFB in washing machines.

Apart from the purchase process, the other key aspect of brand lifecycle management in these categories is product lifecycle management. Several brands have gone under, not because of bad advertising but because they failed to stay on top of the product lifecycle and failed to innovate rapidly; an example is the Ambassador car.

We have seen the opposite too, where a dead brand has been revived from the grave based on a new, better product; for example, the Fiat brand was revived on the back of the Palio.

Another aspect of the product lifecycle management has been managing the inflexion points. In durables and allied categories, every three to five years, there come huge product inflexion points, for example, the inflexion from scooters to motorcycles or from regular TVs to flat TVs.

A significant part of the brand equity is built by riding these product inflexion points effectively. One could argue that a great portion of Hero Honda's success can be attributed to riding the two key inflexions, that is, shift from scooters to mobikes and two-stroke to four-stroke successfully, and not really to any smart advertising.

Hence product made Hero Honda what it is today. It is very critical to ensure that the product is never lagging because if that happens then, however strong the brand may be, it will take a hit.

We have heard the cliche, "consumer is the king". However, I believe we are now entering an era where product will be the king. This is because consumers now want companies to lead them, they want companies to develop products that impact their lives and their lifestyles and they reward those companies.