You will come across Uncountable Lessons of Failure in the World of Mega-Brands and Giant Citadels. But there are Some Names, Which have Managed to Bounce Back. Cheers to Such Goliaths!
HOW DOES THE GODZILLA GET THE SWAGGER BACK?
Vicco Turmeric and Vicco Vajradanti once were marquee ayurvedic skincare and oral care brands. But over time, Vicco failed to keep pace with consumer trends. It was a successful brand promising beauty care in a tube. Even today, the brand enjoys high recall and strong equity. But the brand failed to contemporise; it has failed to capture the new customer. It has thus ceded ground to newer aggressive players in the overall Rs.3500 crore skincare products market, where ayurvedic creams account for close to 15% market share.
But we don’t intend talking about brands which sign their own death warrants. Instead, we would like to document case histories of Goliaths who are trying to beat back bullies on their own turf. To be sure, competition rears its head with unfailing regularity across all segments of the industry. Improved customer sentiments, robust volume growth, a 5-10% price rise, grammage reduction in select biscuits, launches of innovative products and premium biscuits at lower prices, all this and more have meant improved profit margins for Britannia Industries. Yet, analysts are not too optimistic about the company’s prospects, as competition turns intense from foreign (United Biscuits and Kraft) and domestic (ITC, Parle, and Glaxo) players, in addition to the regional brands. Pepsico enjoys 50% plus market share in snacks, but Parle says it will slice 20% of market for itself before the current financial year is done. Who is scared of the might of the multinational muscles?
So the Goliaths, which are caught enjoying a siesta, are successfully challenged by the Davids of the marketing world. A short nap on the steering wheel can prove to be extremely dangerous. The question, however, is: can one still steer oneself to safety? Apparently yes. There are many brands who are trying to reclaim the lost script.
T FOR TEA, T FOR TATA
The branded tea market in India is worth Rs.7500 crore. Yet, though it is a popular beverage in India, tea is losing its popularity amongst youngsters. It is not considered a ‘cool’ beverage, which coffee is supposed to be. To make matters worse, in a recent survey, 77% respondents believed that tea was an unhealthy drink that caused acidity and nausea. Enough cause for worry for Hindustan Unilever Limited.
Then came in the spoilsport Tata Beverages and dethroned HUL from the #1 position in November 2009. The high voltage campaign ‘Jaago Re’ helped Tata increase its market share. Besides, it expanded into new geographies, undertook new launches, took rural initiative, and decided to have a sharper focus on local brands. The company’s core strategy is to look at the large loose tea market and the local brands. It paid the company rich dividends for some time.
HUL decided to fight back. It was successful and beat back Tata in September 2010 with a value share of 22.8% (Tata: 20.2%) and volume share of 18.4% (Tata: 18.3%). HUL played across the consumer pyramid, offering Brooke Bond Sehatmand at the bottom of the pyramid, and Taj Mahal tea bags and Lipton Green Tea to the top of the stack. Besides, it tailored its tea offerings in every state using micro marketing principles. Sehatmand, for example, became Arogya in the South. HUL also revived the core brand Brooke Band Label, highlighting its health benefits. The gambit, for now, has paid off.
THE STUMBLING STAR
The general entertainment channel (GEC) Colors, was a late entrant. So it decided to follow the disruptive tactic of doing the unexpected. The channel pursued two Ds: disruptive programming and differentiation, thereby successfully cutting through the clutter. It began by offering a combo of Khatron Ke Khiladi (to create enough buzz), Balika Vadhu (to cater to the ‘New’ Woman), and Jai Sri Krishna (as a family soap). Nine months into telecast, and it unseated Star Plus from the numero uno position. It won and then retained the top slot in viewership ratings for a good 22 weeks. That was a wake-up call for Star Plus.
Star Plus decided to reinvent itself. It decided to keep pace with the new age Indian woman by continuing with fictional narratives, even if the rival channels had lined up a host of big budget reality. The women characters now depict inner strength enabling them to make intelligent choices for the betterment of their people. Besides, the channel constantly reviews its shows. If a show fails to deliver or has nothing new to offer in its storyline, then it is replaced. Star Plus has even managed to create new time slots at 11pm and 11.30pm. True to its new tagline (Rishta Wahi, Soch Nayi) the channel is offering its viewers a fresh perspective on life and relationships. All this has not only led to conscious repositioning, but also 15-18 of its shows always finding listing in the top 20 slots. The strategy has certainly paid off. The channel is targeting the weekly 400 Gross Rating Points (GRPs; current figure being 340-370), which, if it happens, should mean garnering Rs.1000 crore in ad-revenues. That is nearly 12% out of the total Rs.9,000 crore TV advertising on 500 plus channels!
MERCEDES GIVES RIGHT OF WAY TO THE BEAMER
According to E&Y, India will soon become the fastest growing automobile market globally; currently it occupies the number 2 position, after China. Little wonder then that five marquee names – Chrysler, Kia, Peugeot, Triumph, and Scania – are finalising their entry strategies. In this market, Mercedes has usually enjoyed a position of prominence when it comes to luxury cars. But compatriot competitors have started nibbling away the monopoly share of the company. When BMW, its immediate rival, arrived in India, it targeted the right gaps where Mercedes was more or less not focusing. With the increasing number of C Class 4 wheels rolling on the roads, the aura of owning a Mercedes for the average customer was on the wane; instead it looked swankier to own a ‘Beamer’. Although Mercedes still sells more UVs today (274 in January-October 2011, as compared to BMW’s 256 in the same period, as per SIAM), and is still the #1 in the A4 (Executive Class) segment (1,458 versus BMW’s 1,372 in the same period), and the A6 (Luxury) segment (339 versus BMW’s 307), it’s time for Mercedes to become aggressive and innovative if it has to remain ahead of BMW.
So, the brand has now decided to follow high volume, moderate margin strategy, as against the earlier high margin, low volume strategy. To achieve this, it has made 3 major changes. It has replaced all its earlier models with newer, feature rich, and technologically superior versions but with lower or same price tags. It has launched 22 models since January 2010, quite a contrast to the 25 models it introduced during 1996-2009. Then, it has decided to redesign all its showrooms, which now would have play area for children, and Manish Arora collections for womenfolk. Plus, it is launching its financial services arm and its pre-owned car outlets. Two, the company will have a tech focus. It has installed in the C and E class models, the latest C200 CGI Blue Efficiency engine which, due to its greater fuel efficiency, would appeal to Indian market even more.
SO HOW DO GOLIATHS REFUSE TO GET BULLIED?
The first step to solving a problem is to accept the problem – and the first step towards refusing to get bullied is to accept that there is a danger of that in the first place. As simple as that!
HOW DOES THE GODZILLA GET THE SWAGGER BACK?
Vicco Turmeric and Vicco Vajradanti once were marquee ayurvedic skincare and oral care brands. But over time, Vicco failed to keep pace with consumer trends. It was a successful brand promising beauty care in a tube. Even today, the brand enjoys high recall and strong equity. But the brand failed to contemporise; it has failed to capture the new customer. It has thus ceded ground to newer aggressive players in the overall Rs.3500 crore skincare products market, where ayurvedic creams account for close to 15% market share.
But we don’t intend talking about brands which sign their own death warrants. Instead, we would like to document case histories of Goliaths who are trying to beat back bullies on their own turf. To be sure, competition rears its head with unfailing regularity across all segments of the industry. Improved customer sentiments, robust volume growth, a 5-10% price rise, grammage reduction in select biscuits, launches of innovative products and premium biscuits at lower prices, all this and more have meant improved profit margins for Britannia Industries. Yet, analysts are not too optimistic about the company’s prospects, as competition turns intense from foreign (United Biscuits and Kraft) and domestic (ITC, Parle, and Glaxo) players, in addition to the regional brands. Pepsico enjoys 50% plus market share in snacks, but Parle says it will slice 20% of market for itself before the current financial year is done. Who is scared of the might of the multinational muscles?
So the Goliaths, which are caught enjoying a siesta, are successfully challenged by the Davids of the marketing world. A short nap on the steering wheel can prove to be extremely dangerous. The question, however, is: can one still steer oneself to safety? Apparently yes. There are many brands who are trying to reclaim the lost script.
T FOR TEA, T FOR TATA
The branded tea market in India is worth Rs.7500 crore. Yet, though it is a popular beverage in India, tea is losing its popularity amongst youngsters. It is not considered a ‘cool’ beverage, which coffee is supposed to be. To make matters worse, in a recent survey, 77% respondents believed that tea was an unhealthy drink that caused acidity and nausea. Enough cause for worry for Hindustan Unilever Limited.
Then came in the spoilsport Tata Beverages and dethroned HUL from the #1 position in November 2009. The high voltage campaign ‘Jaago Re’ helped Tata increase its market share. Besides, it expanded into new geographies, undertook new launches, took rural initiative, and decided to have a sharper focus on local brands. The company’s core strategy is to look at the large loose tea market and the local brands. It paid the company rich dividends for some time.
HUL decided to fight back. It was successful and beat back Tata in September 2010 with a value share of 22.8% (Tata: 20.2%) and volume share of 18.4% (Tata: 18.3%). HUL played across the consumer pyramid, offering Brooke Bond Sehatmand at the bottom of the pyramid, and Taj Mahal tea bags and Lipton Green Tea to the top of the stack. Besides, it tailored its tea offerings in every state using micro marketing principles. Sehatmand, for example, became Arogya in the South. HUL also revived the core brand Brooke Band Label, highlighting its health benefits. The gambit, for now, has paid off.
THE STUMBLING STAR
The general entertainment channel (GEC) Colors, was a late entrant. So it decided to follow the disruptive tactic of doing the unexpected. The channel pursued two Ds: disruptive programming and differentiation, thereby successfully cutting through the clutter. It began by offering a combo of Khatron Ke Khiladi (to create enough buzz), Balika Vadhu (to cater to the ‘New’ Woman), and Jai Sri Krishna (as a family soap). Nine months into telecast, and it unseated Star Plus from the numero uno position. It won and then retained the top slot in viewership ratings for a good 22 weeks. That was a wake-up call for Star Plus.
Star Plus decided to reinvent itself. It decided to keep pace with the new age Indian woman by continuing with fictional narratives, even if the rival channels had lined up a host of big budget reality. The women characters now depict inner strength enabling them to make intelligent choices for the betterment of their people. Besides, the channel constantly reviews its shows. If a show fails to deliver or has nothing new to offer in its storyline, then it is replaced. Star Plus has even managed to create new time slots at 11pm and 11.30pm. True to its new tagline (Rishta Wahi, Soch Nayi) the channel is offering its viewers a fresh perspective on life and relationships. All this has not only led to conscious repositioning, but also 15-18 of its shows always finding listing in the top 20 slots. The strategy has certainly paid off. The channel is targeting the weekly 400 Gross Rating Points (GRPs; current figure being 340-370), which, if it happens, should mean garnering Rs.1000 crore in ad-revenues. That is nearly 12% out of the total Rs.9,000 crore TV advertising on 500 plus channels!
MERCEDES GIVES RIGHT OF WAY TO THE BEAMER
According to E&Y, India will soon become the fastest growing automobile market globally; currently it occupies the number 2 position, after China. Little wonder then that five marquee names – Chrysler, Kia, Peugeot, Triumph, and Scania – are finalising their entry strategies. In this market, Mercedes has usually enjoyed a position of prominence when it comes to luxury cars. But compatriot competitors have started nibbling away the monopoly share of the company. When BMW, its immediate rival, arrived in India, it targeted the right gaps where Mercedes was more or less not focusing. With the increasing number of C Class 4 wheels rolling on the roads, the aura of owning a Mercedes for the average customer was on the wane; instead it looked swankier to own a ‘Beamer’. Although Mercedes still sells more UVs today (274 in January-October 2011, as compared to BMW’s 256 in the same period, as per SIAM), and is still the #1 in the A4 (Executive Class) segment (1,458 versus BMW’s 1,372 in the same period), and the A6 (Luxury) segment (339 versus BMW’s 307), it’s time for Mercedes to become aggressive and innovative if it has to remain ahead of BMW.
So, the brand has now decided to follow high volume, moderate margin strategy, as against the earlier high margin, low volume strategy. To achieve this, it has made 3 major changes. It has replaced all its earlier models with newer, feature rich, and technologically superior versions but with lower or same price tags. It has launched 22 models since January 2010, quite a contrast to the 25 models it introduced during 1996-2009. Then, it has decided to redesign all its showrooms, which now would have play area for children, and Manish Arora collections for womenfolk. Plus, it is launching its financial services arm and its pre-owned car outlets. Two, the company will have a tech focus. It has installed in the C and E class models, the latest C200 CGI Blue Efficiency engine which, due to its greater fuel efficiency, would appeal to Indian market even more.
SO HOW DO GOLIATHS REFUSE TO GET BULLIED?
The first step to solving a problem is to accept the problem – and the first step towards refusing to get bullied is to accept that there is a danger of that in the first place. As simple as that!
No comments:
Post a Comment