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

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