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Building Brands
(8 September 1999 - Business Line)

On the old Prabhadevi Road in central Mumbai, DGP Enterprises chairman Dilip Piramal is ensconced with his managing director A.G. Warey as they chalk out the strategic imperatives to take the VIP brand to a whole new audience. Students and young professionals are in the crosshairs as the concept of a hipper, trendier and more zingy travel companion is being touted.

Meanwhile, Ahmedabad's Ashram Road has Nirma chairman Karsanbhai Patel in a huddle in his third floor chamber with his senior management team evaluating the success logged by Nima Rose soap, which was launched aggressively earlier this year. Nima Rose is being used as a flanking device by Nirma as it taps smaller regional markets and stops rivals in their tracks. In fact, the Nima brandname is now being used to sell detergent - cakes and powder - as well as soap. The creation of a parallel brandname, a first for Nirma after years of dominating the marketplace through umbrella branding, is already paying dividends.

In April 1998, Nirma turned the price-sensitive soap market on its head by launching Nirma Lime Fresh. In a month, 17 million cakes were sold and, as Karsanbhai himself says, "My strategy is very clear - I will not launch a product without test-marketing it. Further, I will not advertise till I launch the product. Remember that I am selling mass-based, competitively-priced products." A high-decibel advertisement featuring Ria Sen followed the Nirma Lime Fresh launch and the rest, as they say, is history.

Nirma, with a 38 per cent market-share in detergents (cake and powder) decided to add value to its portfolio in 1992 by launching Nirma Beauty soap. Today it has an 18 per cent marketshare in the soap segment. Nima Rose is already a market leader just as Nirma Lime Fresh is. when Jai launched its lime variant, Nirma was quick to follow up its Nima Rose brand with a lime variant. Nirma is the perfect story of brand-building. Karsanbhai says, "In the early 1980s, when television began to make inroads into rural and urban India, Nirma would be one of the advertisers for the Sunday evening Hindi feature film. But the positioning of the TVC (TV commercial) was such that the majority of the populace thought the film was being sponsored by Nirma. This stood us in very good stead."

Similarly, overlooking the Arabian Sea in his Rang Sharda office in the western suburb of Bandra in Mumbai, Marico Industries managing director Harsh Mariwala is putting the tentpoles in place for his relaunch of Mediker, a brand acquired from Procter & Gamble for Rs 10 crore. Companies armed with brands are resurgent on the stockmarkets. Marico, with Parachute and Saffola, is the perfect example. Marico has very smartly used the natural route to deliver promise. Mediker has been acquired as the group did not have a serious medicated brand in the problem-solution area in hair care. A need gap has thus been plugged.

Are brands enduring or ephemeral? Do they become part of a habit? Jagdeep Kapoor, brand-builder and managing director of Samsika Marketing Consultants, reckons that serious brand-building as a concept has emerged lately in India. He says, "Earlier people would snigger at the thought of systemising the process, but now that brand power has come through, good brand strategies will triumph in the market-place."

It must be mentioned here that India is a large market which consumes a wide array of products. In fact, according to socioeconomic classification, there are 12 different segments. There has to be a passion to build a brand, for it is very much akin to nurturing a child or a plant, for that matter. A high level of involvement and marketing discipline is required to shore up a brand. What's important here is that marketing has different connotations for different organisations. Kapoor says, "It should be a culture within the organisation. I have created what is called the land and brand module. My contention being that, just as one invests in land, one invests in a brand. You have to have a long-term vision in brand-building that remains the edifice. For instance, brands like Navneet, that I thought had submerged, have been jumpstarted with the help of external inputs. Restructuring of the product portfolio and repositioning the brand has enabled it to grab marketshare and create a profile for itself."

Monginis, the franchise cake shops in Mumbai, have gone national very successfully using Kapoor as the whet-stone. Over the last three and a half years Monginis has improved from 69 franchisees to 203 and the vision for 2002 is 1,000 shops.

Mariwala firmly claims that brand-building and survival in a free market depends not just on which category you are operating in, but the presence of global brands in it and, most importantly, the intensity of the battle. Take Coke and Pepsi, who with their deep pockets view markets very, very passionately. Soft drinks, toothpastes, or shampoos are arenas in which MNCS hold the cutting edge with a high decibel marketing. Mariwala says, "We aren't vulnerable to that extent. While we are fighting MNCS, these are very much desi MNCS operating from within. At the end of the day one has to be insightful to capture the consumer's interest and this should translate into brandworthiness."

Dilip Piramal reckons that the VIP brand was build on advertising, promotions and a retailing thrust. "Yes, it was built from ground zero, but product quality has always been an engine. Today Samsonite's presence does not deter me, for I have managed to impact the top end of the market through better designing. In 1999-2000 VIP's adspend will be close to Rs 20 crore."

At  Marico the view is that, as the environment is constantly changing, opportunities and competitive threats have to be absorbed. The challenge of change is what Mariwala is guarding against. Branded coconut oil is a Rs 600 crore market, while the non-branded market is valued at more or less the same. Parachute and its extensions are the market leaders. Though there is competition from Shalimar in the east, Coco Care in the west, and HLL'S Nihar, Marico has safeguarded its interests and share of the market by focusing on advertising, sales and distribution. Marico's adspend is 7.2 per cent of its sales turnover (Rs 551 crore in 1998-99). Nearly 50 per cent of Marico's sales come from parachute and its extensions.

Kapoor maintains that brand-building is based on honesty, distribution, segmentation, pricing strategy, perception management with advertising being a small component. "Brands live beyond human beings - they don't have just a personality, but longevity. Brand management is an integrated process. One cannot live on past glory. It is a consistent, persistent and insistent exercise."

Which is an interesting thought, for if you look at Thums-Up, Kissan, or Captain Cook, they continue to do well despite having changed hands. But against that there are brands which simply begin to fade for lack of nurturing and embellishment. If they are not made contemporary and their perceived value is not cranked up and concurrently the consumer's expectation level goes up a notch, they begin to get inundated. They begin to drift, then languish. Examples that come to mind are Promise, Murphy and Rasna.

Marketers will tell you that one needs to be proactive in brand-building. Let us take the case of Promise toothpaste, which in 1990 had a sizable 12 per cent marketshare, which was incidentally better than HLL'S. But as HLL turned on the heat (see box), Promise lost focus. As the freshness market in toothpaste started growing with the advent of Close-Up, Balsara's Promise deviated from its given niche of being clove-dominated. It started targeting freshness, a folly in the ultimate analysis. Things went wrong when it was discovered that it was an undersupported category in terms of advertising and marketing expenditure. Further, promise didn't have the ability to cross-subsidise in terms of surplus cash. Colgate too faltered, reacting   too late, not changing its mix. Colgate Dental Cream was not bolstered at this vital juncture. A simple marketing tenet is that, when you are battling for matketshare, the core business has to be protected at all costs.

When HLL took on Nirma by launching Wheel, Rin and Surf were never neglected. On the contrary, they were beefed up. Rajesh Jejurikar, general manager at Marico, states that the core values of the brand have to be communicated efficiently at all times. That is one of the reasons why Marico is using conquest, a consumer contact process, for constant brand feedback.

In toothpaste HLL was the aggressor and most proactive. Says general marketing manager Mukul Deoras, "We cannot afford to be the followers. Brands don't happen; they have to be clearly articulated with a   relevant positioning strategy. Every single element of the brand's attributes and mix reinforces it position consistently." Propositions have to be created as price points for brands are less elastic to changes unlike commodities. Nirma is the finest example of price-sensitive products sweeping the opposition. But HLL too has brands like Sunlight and Dalda, which not only became irrelevant in their respective categories but couldn't transcend to the next level.

Against that you now notice that the commodity business is gradually turning into a branded commodity business with the MNC marketers moving up the value chain. Cases in point are HLL, Pillsbury and International Best Foods, who are battling for the branded aata market. Niches are always easier to protect. The ayurvedic business, where MNCS cannot bring in global muscle and leverage, is one example. But here too, brand-building is a continuous process. Dabur and Himalayan Drug Company are relentless in this regard.

Of oral care and opportunity

A classic case of brand-building in recent memory is Hindustan Lever's imperatives and intent in oral care, a market it has not only assiduously built over the last decade but also made deep incursions into rival territory grabbing a substantial marketshare. The toothpaste story begins in the late 1980s, when HLL had a marketshare of just 4-5 per cent through two brands - Signal and Close-Up. It was at this point that HLL realised that a huge need gap existed and the opportunity was staring it in the face. With oral care being designated as an integral part of personal care, HLL made its strategic foray. Concurrently, sweeping reforms were taking place and the third party manufacturing route was available. The action plans was clear - relaunch Close-Up, delist signal, and concentrate on building on brand.

Differentiation is a critical area in the consumer's mind. So HLL decided to be distinct and attack with a genuine and unique selling proposition. Mukul Deoras, general marketing manager for toothpaste and toothbrushes, says: "Everything about the new Close-Up was different; it had functional attributes, brand benefits and brand personality. When the world was full of white toothpastes, we offered the first gel, a spicy clove-based toothpaste in a novel collapsible laminated tube with intrinsic characteristics offering youthfulness and vibrancy."

Those were the days when tooth decay was top of mind in the oral care category, but Close-Up's blueprint offering fresh breath and white teeth made a positive impact as it targeted a spanking new audience - the 15-35 age group. Deoras claims that, through its campaigns, HLL was now talking to the customer directly on a one to one basis. "When Close-Up was first launched it was seen as an elitist, urban and westernised brand, but during its successful relaunch it evolved and expressed itself into a  fresh breath-confidence booster mass-market brand."

This was the turning point as the brand property changed and a new segment was created. Pertinently, the toothpaste market today is valued at Rs 1,780 crore. Colgate remains the market leader with 51.1 per cent, but HLL is closing up with a 37.03 marketshare. The evolution has been staggering - in 1990 HLL had a 10 per cent marketshare, which grew to 18 by 1995 and is currently pegged at 37 per cent.

Oral care valuation for 1999
Toothpaste Rs 1,780 crore
Tooth powder Rs 462 crore
Toothbrushes Rs 390 crore

Once Close-Up started climbing, HLL felt health remained an important benefit segment. It also felt that it had a large enough business to use as a springboard for the next step on the ladder. A relaunch of Signal was seen as a case of carrying the baggage of the past. Protection of the teeth thus became the focus area and 1993 saw Pepsodent being launched, and once again it bridged the need gap effectively. Today, of HLL's 37.03 per cent marketshare, Pepsodent-G, 2-in-1, and Advanced contribute 15.38 per cent.

The next level came when HLL decided to leverage toothpaste's brand equity in toothbrushes and in this too it made rapid headway. Today the toothbrush market is valued at Rs 390 crore, of which HLL has a 25 per cent share. Interestingly enough, 20 per cent of the total oral care business is in toothbrushes and HLL is now operating across all the price segments.

The adspend in oral care is pegged at Rs 160 crore and HLL alone forks out a third of that figure. The clinching fact, however, is that oral care is now contributing to the juggernaut's bottomline in a big way.

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