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Functional Area: Marketing

SAMIT KHANNA PUNEET SHARMA

SECOND YEAR, SECOND YEAR,
FMS DELHI FMS DELHI

samit-khanna@fms.edu puneet-sharma@fms.edu
+91 9891 664 003 +91 98719 59659
Executive Summary

"Local brands show what we are; global brands show what we want to be." – Consumer Insight

There is a general agreement that source of prowess of successful companies is the presence of big
brands in their portfolio. Every company wants to create & own the ageless brands & does spend a lot
of money towards this objective. Yet, many top executives are not very comfortable with following a
structured approach to branding.

Our research on the past successful and unsuccessful brands says otherwise. On a careful inspection
successful brands show a lot of common threads. These commonalities led us to model the consumer
behavior model that is the ultimate reason for the existence of any brand. Kevin Keller captures the
essence of branding when he says “A brand resides in the minds of consumers”. A brand should move
beyond its physical character to acquire a perceptual character hence representing itself as a means to
achieve what is sought by a customer.

In this paper, we start by discussing what a brand is from the perspectives of the organization as well
as the consumer. This gives us the foundation for building the models subsequently. Next we build a
model for consumer decision making process and bring in the perspective of the Indian brands vis-à-
vis multinational brands. We touch upon the importance of various parameters in building the Indian
brands and stress upon them with relevant examples. It’s not just the initial creation of a brand but the
reinforcements, evolution and revitalization that ultimately decides the winners in marketplace.

We have also conducted a primary survey to analyze the quality perception and understand the
consumer behavior and hence, help us arrive at the model. We conclude the paper by discussing a
framework which could help build the Indian brand both domestically and globally.
Introduction

“A Brand exists in perceptual space and is a perceptual entity”.

If Coca Cola’s facilities all over the world were to burn overnight, with all their physical assets going
up in smoke, the company would be able to start up the next day due to the value of its most important
asset — the Coca Cola brand, which in 2005, was estimated to be worth $67.5 billion. It’s hard to
imagine that an intangible can have such value, but the statistic shows that a brand is much more than
a mere name or a logo.

So what is a brand all about that all the companies spend so much on creating? In today’s scenario
brands are the basis of consumer relationship. A Brand to some may be a simple name, logo or
symbol whereas to others it may be a promise, guarantee, reputation or identification. But most
importantly, brands are conduits. They bring together consumers and marketers closer and bind them
together.

As Indian companies seek to be major players in global markets, one of the key challenges they face is
building global brands. Building brands is important — as wages rise with economic development,
competing on cost alone may not be sustainable. While brands may not necessarily translate into
premium prices, they help companies gain higher market share in a crowded market place as they
convey an assurance of quality and reliability.

In this paper, we have tried to understand why Indian consumers have the perception of global brands
as being better in quality and the factors that are determining factors for successful establishment of
any product as brand. Examples considered for this analysis are mainly from India.
Consumer Buying Behaviour: The Model

“The product can be copied, but a brand in its totality can not be”.

Strong brands have a distinct place for themselves in the minds of the consumers. Of course, all strong
brands are differentiated and command a lot of awareness in mind space of consumers; still the
attribute that actually results in increased sales hence generating billions of dollars is the powerful
appeal these brands generate.

Create awareness Blitz Differentiation

Generate
Appeal

Study Consumer Behavior Perspective

High Low Experiential
Involvement Involvement

Extensive Focus on one Communicate

information attribute feelings

Establish Concentrate on High Visual

superiority problem solution Content

Appeal to Short & frequent Appeal to

Reason visual messages Emotions

Appeal to toned Global Brands Bastion

Global Brands Bastion down reason
Indian Brands Bastion
Figure 1: Model for Marketer - Consumer Buying Behavior

Marketers first have to create and then maintain a minimum level of awareness about the brand.
When Mahindra & Mahindra went for a blitzkrieg for Scorpio it was to create a minimum level of
awareness. The products that fail to maintain the awareness go into pavilion.
The prospects should be able to differentiate the product offering from the others in market. Ensuring
this differentiation has become a major objective of communication. As emphasized earlier, a brand
has to generate a powerful appeal to customers to be successful in market. Premier had a lot of
awareness and differentiation with respect to Maruti or Ambassador, but still it went out of market, as
it lacked the appeal.

For high involvement products, marketers should provide extensive information to the user and
establish their brand superiority over the rival brands. Hyundai ran a series of advertisements that
compared Santro’s features to those of competitors to establish its brand superiority.

Consumers in low involvement conditions tend to be problem solvers rather than satisfaction
maximisers. So focus on one or two attributes will fall with in their limited cognitive inclination.
Revive- ‘instant starch’, Disprin- ‘fast relief’ etc. are some instances. Brand communication should
attack the problem and establish brands as problem eliminators. Short and frequent messages increase
the top of mind recall, hence facilitating the brand at point of purchase. High visual content is
consistent with passive nature of consumer.

Some products like flowers, cards, etc. are bought for their affective delivery or satisfaction. In such
categories, the advertisements should arouse feelings in the consumer, hence generating an appeal to
his emotions. Omega’s ‘sign of excellence’ ignites same appeal to emotions.

Also point to note here is that, it is the Low Involvement products where Indian brands have been
doing exceedingly well and being accepted by the consumers. As we move up the value chain to the
high involvement and experiential products, there is a dearth of Indian brands and the global brands
are more prominent and have consumer acceptance.
Global Vs Indian Brands

“To remain domestically competitive, a brand has to be globally competitive”.

Gone are the days when a company could be assured of its success in its strong hold bastion. Today
with the economy opening up, it becomes more accessible to multinationals with their proven track
record can displace any domestic brand. Hence, it is becoming increasingly important for the Indian
brands to establish their superiority in India and globally.

So, what is it that sets them apart from the Indian brands. The following factors are considered as
important and ratified by the primary survey (refer to annexure):

! Customer Focus: The Indian companies rank poorly on this aspect. Global players have a
perception of better focused strategy towards the consumers and work towards satisfying the
consumers rather than just selling the products.

! Symbolic Value: Owning and using a global brand has more symbolic value than that
presented by an Indian brand. Global brands have a certain amount of aspirational value
associated with them which makes them more desirable.

! Global Citizen: Consumers look to global brands as symbols of cultural ideals. They use
brands to create an imagined global identity that they share with like-minded people.
Transnational companies therefore compete not only to offer the highest value products but
also to deliver cultural myths with global appeal.

! Social responsibility: People recognize global companies wield extraordinary influence, both
positive and negative, on society’s well-being. They expect them to address social problems
linked to what they sell and how they conduct business.

! Perceived Quality: Consumers watch the fierce battles transnational companies wage over
quality and are impressed by the victors. People like global brands because they usually offer
more quality and better guarantees than other products. That perception often serves as a
rationale for global brands to charge premiums.

Perhaps the biggest differentiator and inhibitor for the domestic or local brands in context is the
perception of quality. Let’s discuss this in greater detail to come up with a solution to the problem.
PERCEIVED QUALITY

Perceived quality is defined as the customer’s perception of the overall quality or superiority of a
product or service with respect to its intended purpose, relative to alternatives. It is a perception
created overtime by the customers and hence cannot be objectively determined. Global brands score
higher than the Indian brands in perceived quality. So what creates a favorable perceived quality for
these brands:

! Global success

! Functional Expertise

! Financial Might

! Strength in research

! Flexible

The advantages rendered by a favorable perceived quality can be seen in the diagram below:

Perceived Quality

Channel Member Differentiation/

Reason to Buy Price Premium
Interest Positioning
Strategies for Indian Brands: The Way Ahead

“Competitive Marketing is all about 3 W’s – War, Warrior and Wealth”.

The gradual integration of the Indian economy with the global economy marks the dawn of
competition which is favorable for the customers. We suggest the following strategies for Indian
Brands to fight it out with the Global brands:

1. Have a Vision for the Brand and Develop the Brand Essence

Build a Brand Arrow for your brand and understand what the value for your brand is. The brand arrow
is as shown below:

An understanding of the brand arrow enables a more focused strategy for the brand. This further
enables to an understanding towards the subsequent brand extension and creating a stretch map for the
brand.

2. Choosing the Right Brand Name

In cases where the country of origin is closely associated with the product being sold, a brand name
and a communication strategy that emphasize this origin are helpful. In other cases, the company and
brand may actually need to dissociate themselves from the country of origin. Sometimes good brand
names can add intrinsic value to the product being promoted and make the task of the other elements
easier. "Taaza" tea is a case in point -- it instantly communicates "freshness", a value consumers seek
from tea. "100 Pipers" conjures up naturally pictures of Scotland to a normal consumer and it adds to
the mystique and strength of the brand.

And a good name can give a brand a "head start" rather than just a "start", as has been the rule in the
past. "French Connection" in the UK is a great example. When the brand was re-launched in 1997, it
was just middle-of-the- road brand appealing to diverse audience with little fashion connotations.

The drama of the re-launch started with the name -- someone very cleverly recombined the initials of
the company to come up with an interesting name, FCUK. The name was a great starting point for a
brand with an attitude. Not surprisingly, it captured the imagination of a younger audience.

3. Creating Blue Oceans rather than fighting in Red Oceans

The Indian brands should focus on creating uncontested space rather than trying to enter the already
cluttered market. With its huge textile exports India can become the 'fashion apparel centre of the
world' within a decade. India's dark colored Old Monk rum should take on the mighty white colored
liquor, Bacardi, through 'gutsy, non-conventional, intrusive marketing' that highlights its history,
toughness, color and irreverence of a challenger, which are the qualities that connect with today's
young drinkers.

Create a
different
category Create a Create a
Scan Brand Brand
Competition Personality Identity

Be opposite Unique & Relevant

of leader

Figure 4: Model for Blue Ocean Strategy

Indian mangoes can also fly India's flag high in international market; 'Ambo', the Alphonso mango
brand of an Indian farmers' cooperative, has the potential to quickly expand its export sales by a
conservatively estimated 1,000 per cent.
4. Pricing Strategy

Well established brands ensure that the price they charge is not too high or too low. In fact base price
should be based on the perception of the perceived value instead of delivered value.

Functional Value

Symbolic Value

User Image Govt Regulations

Perceived Value
of the benefit
Company Image package Market Factors

Pricing Strategies

Figure 5: Pricing Model & Strategy

The first step towards deciding pricing is to measure the perceived functional and symbolic benefits
of the product. Maruti Swift scales high on functional benefits and symbolically, it is fresh, youthful &
attractive.

User image plays an important role in determining the perceived value of a package. Mont Blanc may
not be the best pen around technologically but the user image attached with the brand increases the
premium that can be charged. Palio had strong functional and symbolic benefit package but the image
of parent company Fiat played major spoilsport in the brand’s downfall.

Once we measure the perceived value of the brand, brand manager can set his eyes on deciding the
pricing strategy. Psychological, Skimming or Penetration strategy can be decided upon.

The market factors like the pricing of rival brands in market and government regulations on margins
play their own part in determining the ultimate pricing strategy. Pepsi may score very high on every
parameter but it can’t charge more than Coke does.
5. Bonding with Customer

Marketer must first understand the nature of his brand and opportunities it has, to forge relationships
with customers.

Product Process Relationship

Oriented oriented oriented

Experience Manager Get Retailers,

= Perceived Customer Be Socially
value touch points Responsible

Trust Willingness Commitment Affinity

Figure 6: Model for Bonding with Customers

In product oriented strategy, the delivered value should be greater than or equivalent to expected
value as was done by Chetak which established itself as a major brand just on the basis of its product
superiority. Brands like Pizza Hut follow more of a process oriented strategy when they try to create
a unique experience for the customer. Sunflame follows relationship oriented strategy when it takes
its dealers on a cruise ship trip.

The ultimate objective of building bonds with customers is to get the trust, willingness and
commitment of customers, hence making them loyal to the brand.

6. Brand Evolution and Revitalization

Brand extension has found favors with modern marketing world because of the advantages it has over
the other product launch options.

Brand extension is not as simple as attaching an established brand name to a new product. Ponds in
eighties tried with Ponds Toothpaste, only to disappear from the market. What determines the success
of extension is character of brand which continues to evolve over time.
 Evolution of Character of Brand with TIME

Brand Intangible Brand

Evolution
AMUL
Know How Brand SYMBOL OF
PERSONALITY
Formula Brand AMUL
EXPERTISE Indianness
IN MILK Love
Product Brand AMUL PROCESSING Taste
MILK Fun
Milk
AMUL MILK Type I Ghee
Type II Butter
Type III Condensed Milk

Time

Brand identifies the product Products are manifestations of brand

Look for fit with brand character

Figure 7: Model for Evolution of Brand

Many brands start as product brands i.e. there is close approximation between brand and product.
MDH is a product brand for masalas. Sustained efforts and investments in the brand endow it with
intangibles that get accumulated Over the time product brand goes on to become the formula brand
i.e. it implies that a set procedure is used to create the product. The brand may begin to signify
expertise in a particular field. This expertise may lend itself to related products & brand may be
extended to products related with its field of expertise. Dettol has a long time association as effective
protection against germs. It has successfully used this association to launch soap, shaving cream,
plaster and talc in market.

At this stage, the brand can lend character, style, image & soul to the products that carry its name.
Cartier has strong associations with prestige, status and opulence. It successfully goes with a variety of
products like watches, jewellery, bags and pens which are not related with one another functionally.
Conclusion

“A brand is the most valuable asset that a company can own”.

Branding needs a shift of tactics and thinking on the part of marketing executives. With ever
increasing customer awareness levels, marketers can no longer afford to be complacent about their
brands & branding strategies.

Successful branding needs a structured approach with due attention to what seem to be very minor
details. It becomes difficult for Indian brands to create a niche for themselves because of the
abundance and proven credibility of the global brands.

Understanding the differences of perceptions of customers is the key to unlocking the market
potential. We have to understand the credibility, positive associations and additional valuation that
customer attaches with the successful brands. The perception of quality that is associated with the
global brands is difficult to unlock but it’s easier to create a blue ocean of opportunities for Indian
brands.

The way forward for the Indian brands is to go global themselves. Unless and until, Indian brands
become competitive globally they can not sustain their domestic dominance because sooner or later
they would be over taken by the global majors.

Finally the task doesn’t stop with the one time creation of a successful brand. We have to measure its
customer-connect, evolve it and consistently revitalize it to keep it relevant to the ever changing
consumers.
Annexure

We conducted a small primary survey to find out the perceptions of people regarding the global and
Indian brands. The questionnaire as well as the findings are attached below.

Details:

! Sample Size: 58
! Customer Contact Points: CP, Dwarka Main Market, Gurgaon Malls, Kamala Nagar Market
! Target Segment:
o Males Age group 25-50
o Females Age group 25-40
o SEC Classification: A1 + A2
! Methodology: In Depth Personal Interviews

Consumer Qualitative Questionnaire

1. Name: Phone:---------

2. Age:

3. Occupation: Student/Private service/Govt. service/Business/Self-employed

4. Family chief occupation (If student):

5. Position of responsibility:

6. Education: Literate/School (4 yr)/School (5-9 Yr)/SSC/HSC/Graduate/Post graduate/Post-

graduate professional

7. What are the qualities of good brand, as perceived by you? Kindly mention some of them in

the table below.

8. Rate the following needs on a scale of 1-10, where 1 Least, 10 Most wanted
1 2 5 9 10

Least wanted Importance for you Most wanted

1. Quality 2. Price 3. Service 4. Status 5. Indian or

Global

9. Which of the following Deodorants would you prefer and rank them in a order – Axe, Adidas,

Rexona

(Refer the need list above for the respective numbers)

Rank 1 Rank 2 Rank 3

Deodorant
10. Which car would you prefer?

a. Tata Indigo d. Hyundai Accent

b. Chevrolet Optra e. Maruti Baleno

c. Honda City f. Others

11. Which consumer durable brand would you prefer?

a. Onida d. Videocon

b. Samsung e. LG

c. Hier f. Others

12. Name makes a difference in the choice of brands

a. Yes

b. No

c. Cannot Say

13. An Indian brand compared to global brand on the following parameters:

a. Price b. Quality
 c. Availability f. Aspirational Value

d. Status g. Trendy

e. Service h. Variety/ Assortment

As per the survey we could spot the following trends in the results:

Indian Vs Global Brands

50
45
40
35
30
25
20
15
10
5
0
e

dy
ce
lity
ice

ity

ty
us

rie
en
al
i
l

at
bi

rv
Pr

ua

lv

Va
St
la

Se

Tr
Q

na
ai
Av

tio
ra
pi
As

Indian Global

Perception of Brands

200
180
160
140
120
100
80
60
40
20
0
Quality Price Service Status Indian or Global
 Prefernce for Consumer Durables

Onida
Samsung
Hier
Videocon
LG
Others

Deodorant Preferance

Axe
Rexona
Adidas

Car Preferance

Tata Indigo Chevrolet Optra Honda City Hyundai Accent Maruti Baleno Others
References

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2004

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5. Schiffman, Loen G, L L Kanuk, “Consumer Behaviour”, Prentice Hall, 1997

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