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Brand extensions - RIL
 

Brand extensions - RIL

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  • Gujarati in business sense while Jatt in attitude – westernized – coz is proficient in business nuances
  • RRL was close to breakeven in 2008, but the economic slowdown over took themCombined loss of 17 subsidiaries Rs. 244 Cr against a revenue of Rs. 5310 Cr
  • Not able to fit this framework for RIL and Hospitality Sector
  • EPC – Engineering Procurement & ConstructionB: Already into petrochemicalsC: Have a know how of constructing large industrial complexes starting from polyster plants to refineriesE: Philosophy of “aamaadmi” brandD: common denominator of capital intensiveRRL: overlap of know how (petroleum retail and lobbying) and interest is capital intensive and growing with growing economy
  • A: CausticsB: Interest in refineriesC: already into solar energy
  • Shadow endorser – controlling stake

Brand extensions - RIL Brand extensions - RIL Presentation Transcript

  • East India Hotels
    RELIANCE INDUSTRIES LIMITED
    Group 6
    Akanksha Singh 0911004 Saurabh Chandra 0911047
    Sumit Kumar 0911057 Arvind Choudhary 0911085
    Bhawna Jain 0911301 Ganeshram K 0911309
    Shikha Rawat 0911344
  • b2b
    Core Competencies
    Focus on capital intensive industries in which success turns on the ability to get around regulators & competitors
    Time and cost effective completion of complex & advanced technology projects
    Unmatchable ability to manage relations with the government
    b2c
  • Brand Identity - RIL
    RIL as a Product
    RIL as Organization
    RIL as Person
    RIL as Symbol
    • Largest polyester yarn and fibre producer in the world
    • Among the top ten producers in the world in major petrochemical products
    • Very strong backward integration
    • Positive effect on operating margins and interest costs and decreased the Company's exposure to cyclicality of markets & raw material prices. 
    • Perceived as a B2B brand
    • Jamnagar Brand
    Reliance Industries Limited -
    A-Z of Petrochemical
  • Brand Identity - RIL
    RIL as a Product
    RIL as Organization
    RIL as Person
    RIL as Symbol
    • Fortune Global 500 company
    • Largest private sector company in India (3% of India’s GDP)
    • An empire that other corporate houses aspire to become
    • Aggressive yet Patient!
    • Shrewd Observer
    • Opportunistic – Telecom in 1999, Retail in 2006
    Reliance Industries Limited –
    Dynamic, World Trotting, Pukka Gujarati!
  • Brand Identity - RIL
    RIL as a Product
    RIL as Organization
    RIL as Person
    RIL as Symbol
    • 50 year old
    • Male
    • Westernizing Gujju
    • Politician
    Three faces of Ambani *
    Unique, Larger than life – A Brand name
    A schemer, a first class liar & has no values in life
    Napoleonic –
    Has a more sophisticated political brain, a dreamer & visionary
    Reliance Industries Limited –
    Dominant & Arrogant – a Road Roller!
    * Source: Ambani & Sons by H. McDonald
  • Brand Identity - RIL
    RIL as a Product
    RIL as Organization
    RIL as Person
    RIL as Symbol
    Simple Font – “no nonsense, we mean business”
    Circle around the drop signifying “end-to-end petrochemical”
    Or with its entry into Retail and other segments – “fluid brand with an ability to extend everywhere”
    Reliance Industries Limited –
    Growth is Life
  • Reliance Retail Limited
    • Inception : 2006. Now, network of 660 stores.
    • Presence : 85 cities across 14 states.
    • In two formats:
    • Value - Reliance Fresh, Reliance Mart, Reliance Super
    • Specialty - Reliance Digital, Reliance Trends, Reliance Timeout, Reliance Footprint, Reliance Wellness, Reliance Jewels
  • Brand Identity - RRL
    RRL as a Product
    RRL as Organization
    RRL as Person
    RRL as Symbol
    • First thing that comes to mind – Reliance Fresh and Reliance Mart
    • Value format: daily household needs
    • Reliance Fresh: a neighborhood concept
    • Reliance Mart: an all under one roof supermarket concept
    • Reliance Super: a mini-mart concept
    • Specialty Format:
    • Reliance Digital: consumer durables & information technology concept
    • Reliance Trends: apparel & accessories concept
    • Reliance Wellness: health, wellness & beauty concept
    • RelianceFootprint: footwear concept
    • Reliance Jewels: jewellery concept
    • Reliance Time Out: books, music & entertainment concept
    • Reliance AutoZone: automotive products & services concept
    • Reliance Living: home ware, furniture, modular kitchens, furnishings
    Reliance Retail Limited –
    Everything you need for a happy home at
    Low cost, Value for Money
  • Brand Identity - RRL
    RRL as a Product
    RRL as Organization
    RRL as Person
    RRL as Symbol
    • Lot of muscle power – strong backing by the parent company
    • Rapid expansion
    • Entry with a bang
    • Strong back end operations including supply chain
    • Local orientation
    • Value for money
    Reliance Retail Limited –
    Smart and Swift – zooming in and grabbing space for itself
  • Brand Identity - RRL
    RRL as a Product
    RRL as Organization
    RRL as Person
    RRL as Symbol
    • 30 - 35 year old
    • Female
    • Educated
    • Ensures all your needs are met.
    Reliance Retail Limited –
    Mentally strong, Indian housewife
  • Brand Identity - RRL
    RRL as a Product
    RRL as Organization
    RRL as Person
    RRL as Symbol
    • All logos have a similar pattern
    • The names are written on a red back ground – Aggressive
    • The ‘Reliance’ name is prominent & the font and symbol are the same as RIL – To eliminate confusion & establish strong parent backing
    • The second name however truly depicts the category
    eg, “Fresh” is in green font while “Jewels” is in golden font
    • Only print ads – Harping on great offers, low cost and value for money
    Reliance Retail Limited
    AapkiKhushi, HamariKhushi
  • Basis of Fit
    Skills (Project Management, Lobbying)
    Assets (Capital Base)
    Original Product Class:
    Petrochemicals
    Extended Product Class:
    Retail
    Complements – Petroleum Retail (Separate SBU. Not part of RRL)
    Strategic Fit: Diversified portfolio – Risks hedged.
    RIL
    RRL
    User Type:
    Not common. Extended into B2C
    Symbol:
    Gets them closer to “aam aadmi” brand
  • RRL’s Plan
    Sees opportunity of 2000-5000 stores
    Challenge: “Scaling to do it fast and to replicate as we scale”.
    Intends to renew a rapid expansion drive to compete with street markets
    First plans to expand in tier I and tier II cities, before entering tier III and tier IV cities and towns. The plan for rural India is to begin with sourcing the produce before entering the front-end in retail.
    • Currently buys from farms, fields, vegetable mandis and suppliers
    • Contract farming plan will be activated once the required scale is reached
    • Efficiencies of scale: price points as low as Rs. 99 in its apparel brands to compete with street market prices
    • Top management – “Indians spend mostly on streets which is our main competition. We intend to bring those shoppers to RRL”
    • True Baniya – Willingness to supply private labels to other retailers.
    To compete with the kirana stores
    Will start home deliveries of groceries
    “As we keep going down the strata, our hypermarkets will keep getting smaller,” (average kirana store is 175 sq. ft in size)
    Retail, like its core businesses, is definitely a business where they can scale significantly and quickly.
  • East India Hotels
  • Brand Identity - EIH
    EIH as a Product
    EIH as Organization
    EIH as Person
    EIH as Symbol
    • Luxury, sophistication and comfort – Aspirational Brand!
    • Product scope:
    • Luxury Hotel => Taj
    • Oberoi => Luxury Hotel!
    • Present in all areas of a luxurious experience
    • On land, water & air
    • Asia-pacific region & Africa
    • Country of origin: very closely associated with India
    • Quality/Value: Best in Asia-pacific
    • Association with use: Business and pleasure
    • Users: Foreigners and upper classes, business (managers & upper echelons)
    • Perfect blend of the region’s culture and the comfort of modern facilities
    East India Hotels
    Maharaja Experience – Living like a King!
  • Brand Identity - EIH
    EIH as a Product
    EIH as Organization
    EIH as Person
    EIH as Symbol
    • Family owned but professionally managed
    • Specialized in hospitality
    • Create an experience
    • Personalized and warm service
    • Trusted
    • Courteous
    East India Hotels
    An epitome of service, luxury and efficiency!
  • Brand Identity - EIH
    EIH as a Product
    EIH as Organization
    EIH as Person
    EIH as Symbol
    • Middle aged Male
    • Foreign educated & modern
    • Connection to Royal Family
    • Elegant and sophisticated
    • Believer in traditional Indian values
    East India Hotels
    Second generation Indian aristocrats
  • Brand Identity - EIH
    EIH as a Product
    EIH as Organization
    EIH as Person
    EIH as Symbol
    • Very specific to hospitality - ‘Oberoi Hotels and Resorts’
    • Font is floral and artistic - reminds of old age aristocracy
    • Sober color –elegance, subdued
    • Either heritage or very modern architecture, nothing in between!
    East India Hotels
    Luxury Redefined
  • Type of Brand & Ability to extend
    RRL
    Capital Intensive
    Long breakeven period
    Diversification Strategy
    EIH
    Capital Intensive
    High barriers to entry
    Long breakeven period
    High returns
    Philosophy
    Interest
    Knowhow
    Formula
    Product
    D
    B
    C
    E
    A
    Petrochemicals
    EPC
    Fuel Stations
    Low cost Airlines
  • Perimeters of Brand Extension
    RRL
    &
    Hospitality
    No-go Area
    Extension Zone
    Outer Core
    Forward Integration like Fertilizers
    Inner Core
    Line Extension
    Oil and Gas Fields
    Spontaneous Associations
    Latent Potential
    Non-conventional energy sources
    Threat to Brand’s capital assets
  • Brand Relationship
  • On EIH
    What PRS Oberoi says
    The hospitality business is very capital intensive. EIH has a growth strategy and it needs strong committed shareholders. RIL clearly satisfies these criteria. It is a long term investor and does not have any conflict of interest.
    Tussles between the next generation of Oberois is evident; PRS Oberoi will not want the brand to be diluted after his lifetime
    Strong external partner who can carry the flame after PRS Oberoi - RIL fills the gap
    Nita Ambani will be appointed to the board; 3 – 5 years down the line, RIL may buy controlling stake in EIH
    RIL will not change the Oberoi brand name, but be a shadow endorser
    What others say
    Emotional Investment
    Mukesh Ambani had approached the Oberois’ 3 years ago to buy the company
    Strategic Investment
    Avenue to invest the excess cash (to the tune of $8 billion) of RIL;
    RIL to help fund EIH’s international expansion into US & UK
    White Knight
    RIL stake intended to thwart takeover attempts by ITC
    Dark Knight
    Is it a replay of the L&T drama of early 1990s?
  • Why the RIL saga will continue
    • Almost all projects are focused/dependent on the growth of the country
    • RIL’s giant projects in urban development, distribution and retailing shows a belief that such schemes are beyond the capacity of the government
    • These sectoral developments are needed by the country, for generation of jobs and revenue
  • Thank You
  • Limitations of the frameworks
    Bases of Fit
    Not able to apply to completely unrelated industry sectors
    Type of Brand & Ability to extend
    Doesn’t discuss about the financial implications/viability
    No clear distinction between the types of brand
    Brand characteristics not analysed from end user POV
    Perimeters of Brand extensions
    Doesn’t discuss about the financial implications/viability
    No–go area not applicable for all brands
    Brand characteristics not analysed from end user POV
  • The Detail in Retail
    Hype & Interest of Retail in India
    Is Big Retail making money?
    Casualties: Shubhiksha, Vishal Retail, Indiabulls!
    Spencers’ loss: Rs 300 crore in 2008-09. Is still losing Rs 12-13 crore a month. Downsizing (<1 million square feet now)
    Shoppers Stop’s loss: Rs 64 crore in 2008-09
    ABG’s More Chain (2007) hopes to become positive in 2012-13
    Pantaloon highly leveraged (Rs 4,000 crore of debt)
    Reliance Retail: loss of Rs 700 crore in 2008-09 & Rs 450 crore in 2009-10.
  • RIL Vs ADAG
    Silent
    Calculating
    Opportunistic
    Ruthless
    Behind the scenes worker
    Constant stream of cash from petrochemicals
    Friends with both ruling & opposition parties
    Businesses tied with India’s growth
    Media savvy
    Emotional
    PR guy
    Cash stream from IPOs
    Friendship with Amar Singh –Suspect in the eyes of others
    Business success depends on taste of consumers