Market dominators

ET Brand Equity carried an article on how some brands like Amul, J&J, Nokia, Maruti etc. have been able to dominate the market for long in their respective categories.

The article says that most market dominators stay at the top for the simple reason that they continually work on putting distance between them and the competition through constant innovation.

The article goes on to cite Parachute as a good example of innovation. The brand it says is the leader because it has continually strived to raise the aspirational value of the category by making coconut oil contemporary and relevant to a younger set of consumers. I have a slightly different take on this. How long will hair oil remain contemporary is a challenge and therefore the brand has already started looking at the ‘next’ extensions – hair gel and cream. It’s more important that the younger consumers use ‘Parachute’, whether it's in the form of hair oil should be incidental.

There are plenty of examples of how even innovative companies have being overtaken by challengers not necessarily from their industry. Kodak was taken by surprise by the digital camera wave and then later by the camera phones. It did however try and still find a way to be relevant by literally ‘sleeping with the enemy’ – you can click on digital cameras or even cell phones and get them printed on a Kodak paper. But Google’s Picasa and Flicker still pose a threat as they make sharing pictures so easy without having to print them. Kodak should have owned photography but failed to see the change.

My sense is that it’s not just innovation but the ability to see the imminent change and its competitive implications that has served these brands better. It’s more about having a clear sense of how one can remain relevant despite the change, in fact a step further on how a brand can ride and exploit the change….or can it be the change?

We are like that only

Just finished reading a book by Rama Bijapurkar,‘We are like that only’. The author has some interesting observations about how companies in the past have faltered by overestimating the size of Indian middle class and considering it as a homogenous group. She therefore recommends constructing the picture of India based on your product class / industry and not going by the ‘one-size-fits-all’ estimates.

She also gives it a historical perspective by linking it to the addition of capacities in the mid 90’s and how by 2000, some of these hopes were squashed. She also emphasizes the ‘Great Indian rope trick of numbers’ – how even small percentages in the Indian context can mean large markets.

I'm back!

What a long break!

What was I doing all this while? Well, I changed job and relocated to the silicon valley of India – Bangalore, from Mumbai, which in fact is my first so far. Not just that, I have joined a new industry – FMCG, after a good 4 years in Financial Services. The transition so far has been good and very interesting. The experience of getting comprehension of an entirely new industry with its own dynamics and ways of operating is motivating.

So far so good. Hope to get down to business soon.

What, exactly, is a Brand?

One comes across various definitions of what a brand exactly is. Some would want to describe it in terms of it being the name, logo, jingle etc. that together help to differentiate one offering vis-à-vis the other. This I believe, though true, does not capture the entire essence of what a brand is. Others tend do describe it in more obscure terms of it being something mystical, the power of which needs to be experienced to be able to believe, that it resides in the hearts and minds of its consumers …..

My understanding is:

A brand is an intangible asset that creates value for all its stakeholders

* The company that owns it by aiming to ensure future cash flows
* The customers that buy and use it through functional, emotional, sensory and ownership related benefits it provides
* For the trade / retailers that distribute and sell it through the cash flows and footfalls it creates to be able to sell more stuff to more people
* Marketers & Agencies that help create and nurture it, through the value it creates for them at both personal and professional level.

I beg to differ with marketers who say that a brand belongs to its customers and not the companies. Customers are definitely the most important stakeholders but they are not the owners. They certainly have a big hand in the financial value created by a brand as they are the ones who decide and pay the premium for it over other similar products/services. However, this economic value is ultimately reaped by the legal owners who at times fetch more value for their brands than any of their physical assets.

Here is a take by Christopher Kenton in Business Week Online on the meaning of brand.

I believe that though the fundamental attribute of a strong brand is consistency, increasingly, it is the ability to creatively challenge customers and be seen innovative that is driving growth for brands like Apple, Nike, Sony, Toyota, Samsung etc.

Luxury goes mass market

This recent article in FORTUNE magazine talks about how dynamics of the luxury business and the definition of what constitutes luxury itself are changing. The worldwide luxury business is pegged at around $220 bn and is growing at a rapid pace.

I had, in my first post on this blog, talked about the nuances and challenges of marketing to affluent customers. 'Massclusivity' = Exclusivity for masses, is a unique trend that's both an opportunity and challenge for today's luxury / premium brands.

Incidentally, today's Business Standard carried an article on why Louis Vuitton wants a feel of Indian luxury market and is willing to roll out more of its brands here.

Brand = Interface, Interface = Brand

Check out this fascinating article on how some brands have created their own unique interface, their own way of how they interact with their consumer and the consumer engages with them. An amazing insight into how this can be integral to a brand and at times its major differential advantage.

Nokia's Big Plans for India

Nokia is an unusual example of a business leader in the sense that it's origins do not lie in the usual suspect countries of US, UK, Japan, Germany, Italy, France etc. nor in the Asian tigers.

For a company, which has its roots in paper, rubber and cables to become a giant in the field of technology and communications is a quantum leap. In 2005 Nokia sold its billionth phone when worldwide mobile phone subscriptions had passed the 2 billion mark.

India recently displaced the US as Nokia's second largest market behind China and this event has many ramifications (It seems Apple has refused to learn from this, it is yet to launch it's i-Phone in India or the other Asian markets and says it would be at least another year when that happens). In this interesting interview, the CEO Olli-Pekka Kallasvuo, while on his trip to India, speaks to Business Week on this tectonic change, how Nokia is gearing to benefit from it and how its next billion phones are going to be sold.