Is there a Future for the Indian Brand? <ul><li>How can an Indian brand fight back successfully after losing ground to an ...
Is there a Future for the Indian Brand? <ul><li>“ Indian” Brands or Indian “ owned” brands. </li></ul><ul><li>“ Indian” br...
Is there a Future for the Indian brand? <ul><li>How can an Indian brand fight back successfully after losing ground to an ...
Situation analysis ( 2000-01) Volume (-7.76%) Turnover (Rs. crores) (-10.3%) PBT (Rs. crores) (-35.4%)
Situation analysis ( 2000-01) Volume – Onida secondary volumes as per ORG
Situation analysis ( 2000-01) <ul><li>Brand position </li></ul><ul><li>Serious erosion in brand dimensions. </li></ul><ul>...
Situation analysis ( 2000-01) <ul><li>Internal position </li></ul><ul><li>Loss of morale, fear and low confidence. </li></...
Situation analysis ( 2000-01) <ul><li>Product situation </li></ul><ul><li>Overall quality outstanding. </li></ul><ul><li>L...
What did we do? <ul><li>First key step </li></ul><ul><li>Put together a Sales and Marketing team </li></ul><ul><ul><li>Sen...
What did we do? <ul><li>Focussed on immediate actionables. </li></ul><ul><li>Serious paralysis situation – lots of problem...
Brand Direction <ul><li>Key changes </li></ul><ul><li>Root the communication in the product. </li></ul><ul><ul><li>We had ...
High end product mix <ul><li>Conscious focus on the higher end. </li></ul><ul><li>Launch of Onida Black flat screen TV </l...
Restructured key areas <ul><li>Reduced outstandings through a conscious CD policy. </li></ul><ul><li>Restructured dealer i...
The results - PBT ( -29.4 %) (49.6 %) (194.9 %)
The results – Market Share
The results (Contribution to Total Sales)
The results <ul><li>Outstanding dropped from 45 days to 32 days. </li></ul><ul><li>Clear focus on mix improvement has sign...
What are the learnings? <ul><li>What are the key principles behind Indian companies fighting back against MNCs? </li></ul>...
Learnings <ul><li>What are the reasons for poor performance? </li></ul><ul><li>Internal </li></ul><ul><li>Management Quali...
Learnings <ul><li>Traditional beliefs on why Indian brands lose out to MNC brands. </li></ul>No, the real reasons for poor...
Learnings <ul><li>Financial Muscle -  How many Indian companies can say they can’t compete because the MNC companies lever...
Learnings <ul><li>Management Quality -  Not having enough world class talent in the system especially at senior levels. Se...
Learnings <ul><li>Indian owned vs MNCs </li></ul><ul><li>Don’t take refuge under the tricolour </li></ul><ul><ul><li>This ...
Learnings <ul><li>Fight for the “top end” and the belly of the market simultaneously. </li></ul><ul><li>The top always rot...
Learnings <ul><li>Reinvent and rename yourself if necessarry </li></ul><ul><li>You can catch the problem at two different ...
Learnings <ul><li>The Indian consumer </li></ul><ul><li>Has a bias to foreign, esp in areas considered to be High tech. </...
Learnings <ul><li>However the more difficult issue is the cluster dynamics. </li></ul><ul><li>Unique problem in India due ...
Learnings <ul><li>How do you address this problem? </li></ul><ul><li>Either the old cluster as a whole improves performanc...
Learnings <ul><li>This would be a tremendous achievement for an Indian brand. </li></ul><ul><li>Advantages of the freshnes...
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Future Of Indian Brand

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Future Of Indian Brand

  1. 1. Is there a Future for the Indian Brand? <ul><li>How can an Indian brand fight back successfully after losing ground to an MNC brand? </li></ul><ul><li>V. Chandramouli </li></ul><ul><li>Vice President Sales, Marketing & Service </li></ul><ul><li>Delegates print version </li></ul>
  2. 2. Is there a Future for the Indian Brand? <ul><li>“ Indian” Brands or Indian “ owned” brands. </li></ul><ul><li>“ Indian” brands – those that have Indianised themselves </li></ul><ul><ul><li>Product and pricing Indianisation. </li></ul></ul><ul><ul><li>Communication. Relatable yet aspirational. </li></ul></ul><ul><li>The future is only for “Indian” Brands, the moot question will be who will be owning those brands. </li></ul><ul><li>Will it be Coke, Honda, Levers, Sony, Pizza Hut </li></ul><ul><ul><ul><li>Or will it be </li></ul></ul></ul><ul><li>TVS, Onida, Nirma, Nirula’s and Colorplus </li></ul>
  3. 3. Is there a Future for the Indian brand? <ul><li>How can an Indian brand fight back successfully after losing ground to an MNC brand? </li></ul><ul><li>The Onida Case study. </li></ul><ul><li>2000-01 & Q1 01-02: the year of hit. </li></ul><ul><li>Q2 2001-02 onwards: The year of partial recovery. </li></ul><ul><li>2002-03: The year of strong performance </li></ul>
  4. 4. Situation analysis ( 2000-01) Volume (-7.76%) Turnover (Rs. crores) (-10.3%) PBT (Rs. crores) (-35.4%)
  5. 5. Situation analysis ( 2000-01) Volume – Onida secondary volumes as per ORG
  6. 6. Situation analysis ( 2000-01) <ul><li>Brand position </li></ul><ul><li>Serious erosion in brand dimensions. </li></ul><ul><li>Image issues </li></ul><ul><ul><li>“ A brand from the past, not relevant today” </li></ul></ul><ul><ul><li>“ Low aspiration, poor man personality, maharajah who had his glory days” </li></ul></ul><ul><ul><li>“ Does not have the latest technology, has dated products” </li></ul></ul><ul><li>Sustainability issues </li></ul><ul><ul><li>“ Onida, hasn’t it closed down already” </li></ul></ul><ul><ul><li>“ Nobody buys a Onida today, its not there in the market” </li></ul></ul><ul><li>Severe loss of consideration </li></ul><ul><ul><li>“ Not for me syndrome” </li></ul></ul><ul><ul><li>Over 50 % prospect consumers were unwilling to even consider the brand. </li></ul></ul>
  7. 7. Situation analysis ( 2000-01) <ul><li>Internal position </li></ul><ul><li>Loss of morale, fear and low confidence. </li></ul><ul><li>Vacuum in Sales & Marketing, a very skeletal team taking the entire load. </li></ul><ul><li>Paralysis on the front end, people did not know what to do, how to respond to the situation. </li></ul>
  8. 8. Situation analysis ( 2000-01) <ul><li>Product situation </li></ul><ul><li>Overall quality outstanding. </li></ul><ul><li>Large user base, High satisfaction scores but low pride of ownership. </li></ul><ul><li>Huge strength on the sound dimension, strong launch of KY Thunder in the middle of all this. </li></ul><ul><li>Delay in launching pure flat TVs. </li></ul><ul><li>Overall pricing higher than the market and what the brand can command. </li></ul>
  9. 9. What did we do? <ul><li>First key step </li></ul><ul><li>Put together a Sales and Marketing team </li></ul><ul><ul><li>Senior level inductions </li></ul></ul><ul><ul><li>Strong corporate S & M team from internal field level people. </li></ul></ul><ul><ul><li>Built a marketing function from scratch. </li></ul></ul><ul><li>Created a process for generating shared thinking in the team </li></ul><ul><ul><li>Think tank meetings. </li></ul></ul>
  10. 10. What did we do? <ul><li>Focussed on immediate actionables. </li></ul><ul><li>Serious paralysis situation – lots of problems, no clear solutions. </li></ul><ul><li>Pricing correction, matched the market. </li></ul><ul><li>Worked on appearing as a happening brand to the trade. </li></ul><ul><ul><li>Retention schemes. </li></ul></ul><ul><ul><li>Display contest. </li></ul></ul><ul><ul><li>Mass mobilisation. </li></ul></ul><ul><li>Displayed our intent, our willingness to stand and fight. </li></ul>
  11. 11. Brand Direction <ul><li>Key changes </li></ul><ul><li>Root the communication in the product. </li></ul><ul><ul><li>We had lost credibility and hence we needed to give reason why’s. </li></ul></ul><ul><ul><li>Focus on communicating high end products only ( Black & KY Thunder and KY Home Theatre) </li></ul></ul><ul><li>Look feel modernisation. </li></ul><ul><ul><li>Strong focus on looking premium and contemporary. </li></ul></ul><ul><ul><li>Kind of clothes, kind of house etc. </li></ul></ul><ul><li>Consistency of presence </li></ul><ul><ul><li>Need to be visible all the time. </li></ul></ul><ul><ul><li>But with medium level budgets. </li></ul></ul><ul><ul><li>Spread spends, innovations. </li></ul></ul><ul><li>All this while retaining the traditional Onida edginess in the communication </li></ul>
  12. 12. High end product mix <ul><li>Conscious focus on the higher end. </li></ul><ul><li>Launch of Onida Black flat screen TV </li></ul><ul><ul><li>Innovative sub branding, retaining parentage yet giving a new flavour. </li></ul></ul><ul><ul><li>Strong focus in communication. </li></ul></ul><ul><ul><li>Strong stance in pricing. </li></ul></ul><ul><li>Building the KY range </li></ul><ul><ul><li>Converted KY from being a model name to a sound attribute. </li></ul></ul><ul><ul><li>Launched the Home Theatres under the KY umbrella. </li></ul></ul>
  13. 13. Restructured key areas <ul><li>Reduced outstandings through a conscious CD policy. </li></ul><ul><li>Restructured dealer incentives to focus on mix. </li></ul><ul><li>Initiated a key retailer package to support 300 key retailers with Traffic Generation initiatives and premium inshop display support. </li></ul>
  14. 14. The results - PBT ( -29.4 %) (49.6 %) (194.9 %)
  15. 15. The results – Market Share
  16. 16. The results (Contribution to Total Sales)
  17. 17. The results <ul><li>Outstanding dropped from 45 days to 32 days. </li></ul><ul><li>Clear focus on mix improvement has significantly driven the gross margin up. </li></ul><ul><li>Stochastic shares and other key brand parameters showing improvement. </li></ul>
  18. 18. What are the learnings? <ul><li>What are the key principles behind Indian companies fighting back against MNCs? </li></ul><ul><li>Would we have done anything different if instead of LG our key competitor was an Indian company? </li></ul>
  19. 19. Learnings <ul><li>What are the reasons for poor performance? </li></ul><ul><li>Internal </li></ul><ul><li>Management Quality </li></ul><ul><li>Systems & Process Quality </li></ul><ul><li>Mindset Issues </li></ul><ul><li>External ( MNC related) </li></ul><ul><li>Financial Strength </li></ul><ul><li>Technology </li></ul><ul><li>Consumer </li></ul>
  20. 20. Learnings <ul><li>Traditional beliefs on why Indian brands lose out to MNC brands. </li></ul>No, the real reasons for poor competitiveness of Indian companies vis a vis MNCs is not external. <ul><li>Financial Muscle - How many Indian companies can say they can’t compete because the MNC companies leverage their financial muscle to make sustained losses? </li></ul><ul><li>Technology – How many Indian companies, if they want, can’t compete on technology? </li></ul><ul><li>Consumer – Yes there is a starting point disadvantage, but this is a fever and not a cancer. </li></ul><ul><li>Financial Strength </li></ul><ul><li>Technology </li></ul><ul><li>Consumer </li></ul><ul><li>Financial Strength </li></ul><ul><li>Technology </li></ul><ul><li>Consumer </li></ul>External
  21. 21. Learnings <ul><li>Financial Muscle - How many Indian companies can say they can’t compete because the MNC companies leverage their financial muscle to make sustained losses? </li></ul><ul><li>Technology – How many Indian companies, if they want, can’t compete on technology? </li></ul><ul><li>Consumer – Yes there is a starting point disadvantage, but this is a fever and not a cancer. </li></ul><ul><li>No the real reasons for poor competitiveness of Indian companies vis a vis MNCs is not external. </li></ul>
  22. 22. Learnings <ul><li>Management Quality - Not having enough world class talent in the system especially at senior levels. Sensitivity to the same. </li></ul><ul><li>Need for fresh thinking at the higher levels. </li></ul><ul><li>Systems & Process Quality – Not enough investment into Systems, into Processes, into HR, into Organizational Culture and Effectiveness Development. </li></ul><ul><li>Mindset Issues – Surrendering before the battle has begun. </li></ul><ul><ul><li>Lowering pricing prematurely. </li></ul></ul><ul><ul><li>Ceding territory mentally. </li></ul></ul><ul><ul><li>Trying to become a Nirma without changing the business model </li></ul></ul><ul><ul><li>Not investing enough in the brand, preferring to play the commodity game. </li></ul></ul><ul><li>Internal </li></ul><ul><li>Management Quality </li></ul><ul><li>Systems & Process Quality </li></ul><ul><li>Mindset Issues </li></ul>The real reason for poor competitiveness of Indian brands is purely internal.
  23. 23. Learnings <ul><li>Indian owned vs MNCs </li></ul><ul><li>Don’t take refuge under the tricolour </li></ul><ul><ul><li>This is the way of digging your grave and getting into it </li></ul></ul><ul><ul><li>The consumer can see when you are clutching at straws. </li></ul></ul><ul><ul><ul><li>He will dump you and dump you badly. </li></ul></ul></ul><ul><ul><li>However stand up and fight and he will give you the credit and the business over a period of time. </li></ul></ul><ul><ul><ul><li>The Indian brands job is to prove to the consumers that they offer world class products. </li></ul></ul></ul><ul><ul><ul><li>Do that and the consumer will himself give you the benefit for being Indian. </li></ul></ul></ul>
  24. 24. Learnings <ul><li>Fight for the “top end” and the belly of the market simultaneously. </li></ul><ul><li>The top always rots first </li></ul><ul><li>If you let that happen then it is just a matter of time. </li></ul><ul><li>Volumes travel bottom to top </li></ul><ul><li>But </li></ul><ul><li>Brand image travels from top to the bottom. </li></ul><ul><li>More than any commercial/ marketing logic, not fighting for the top end tells the consumer that you don’t have it in you. </li></ul>
  25. 25. Learnings <ul><li>Reinvent and rename yourself if necessarry </li></ul><ul><li>You can catch the problem at two different stages. </li></ul><ul><ul><li>When there are symptoms and internal organisational issues, but the brand is still healthy. </li></ul></ul><ul><ul><li>When the brand has completely lost it with the consumer. </li></ul></ul><ul><li>Stage II problems require drastic solutions </li></ul><ul><ul><li>Renaming, building a new brand or a new identity. </li></ul></ul><ul><ul><li>Collaboration, joint branding. </li></ul></ul><ul><ul><li>Strong sub branding strategy. </li></ul></ul>
  26. 26. Learnings <ul><li>The Indian consumer </li></ul><ul><li>Has a bias to foreign, esp in areas considered to be High tech. </li></ul><ul><li>MNCs have a clear starting point advantage. </li></ul><ul><li>However there is an effect of time </li></ul><ul><ul><li>With time the glamour comes down. </li></ul></ul><ul><ul><li>The more the MNC brand tries to connect the faster it becomes Indian. </li></ul></ul><ul><li>Hence managing an individual brand foreign association is difficult but not impossible. </li></ul><ul><li>The Indian brand simply has to work harder and offer more value for 4-5 years. </li></ul>
  27. 27. Learnings <ul><li>However the more difficult issue is the cluster dynamics. </li></ul><ul><li>Unique problem in India due to one shot opening of the flood gates. </li></ul><ul><ul><li>Banks ( ICICI, HDFC, GTB) </li></ul></ul><ul><ul><li>Two wheelers ( Suzuki, Honda, Yamaha, Kawasaki) </li></ul></ul><ul><ul><li>Auto ( Hyundai, Daewoo, Ford, Opel) </li></ul></ul><ul><li>All the new entrants tend to form a cluster in the consumers mind and all the older players tend to form another cluster. </li></ul><ul><li>So Apart from what you are individually, which cluster you belong to also impacts your brand preference. </li></ul><ul><li>This becomes a problem in the short to medium term. </li></ul>
  28. 28. Learnings <ul><li>How do you address this problem? </li></ul><ul><li>Either the old cluster as a whole improves performance tremendously hence negating the clusters itself completely </li></ul><ul><li>Or by breaking free of the old cluster and becoming a part of the new cluster. </li></ul><ul><ul><li>By consistently demonstrating that what you do </li></ul></ul><ul><ul><li>Is different from the stereotyped image of the old cluster. </li></ul></ul><ul><ul><li>Is superior or comparable to what the new cluster is doing. </li></ul></ul>
  29. 29. Learnings <ul><li>This would be a tremendous achievement for an Indian brand. </li></ul><ul><li>Advantages of the freshness of belonging to the new cluster. </li></ul><ul><li>And the solidity and reliability associated with its heritage. </li></ul><ul><li>This would make the Indian brand more powerful than the MNC brands </li></ul><ul><li>And this is the crowning glory we are aiming for. </li></ul>
  30. 30. Thank you

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