A Requiem for a Brand

By Pradeep Chandra

Drawing from his extensive business management experience, Pradip Chanda turns traditional wisdom on its head when he proposes that brand loyalty is inversely proportional to the income and education levels of the 'knowledge consumer'. He examines how and why brands have become strategic assets, traces the evolution of knowledge consumer and what can companies do to protect equity of the brands they have nurtured over decades. A new approach to building brand loyalty that gives marketers a competitive edge in today's high-tech, high-stakes and brand-hostile environment. The book combines the knowledge with engaging real-life case studies and proven examples.

• Language: English
• Publisher: Roli Books
• Release date: Apr 6, 2011
• ISBN: 9788174369482

Book preview

Preface

Almost everyone I know in the marketing and advertising fraternity violently disagrees with my proposition that Brand Loyalty is inversely proportional to income and education levels.

That is not surprising. Traditionally managers responsible for building brands have firmly believed the exact opposite. A belief no doubt reinforced by the challenges brand managers have faced in weaning away loyal users from established brands especially in markets where the disposable income available in consumer hands has been limited.

I have developed my proposition based on my experiences in my early life in brand management roles and validation thereof later in my strategic management positions when I had to sign off on short- and long-term marketing strategies.

‘A Requiem for a Brand’ is more a question than an obituary. That is because brands as strategic assets are here to stay, contrary to what the title suggests. It’s just that times have changed and brands need to be nurtured differently now than ever before.

This book is therefore presented in three parts. The first part examines how and why brands became strategic assets. The second part traces the evolution of the Knowledge Consumer, who changed the rules of the game and raised questions about the value of a brand as a strategic asset. The profile of the Knowledge Consumer led me to my proposition ‘Brand Loyalty is inversely proportionate to income and education levels’. The final section deals with the transition of the Knowledge Consumer to a Concerned Consumer and what savvy companies can and are doing to protect the equity of the brands that they have nurtured over decades.

Each part is supported with case studies, as witnesses are summoned into courts by defending counsels, to lend credence to my proposition. .

You are the jury. I hope you enjoy the ensuing debate.

Please e-mail the verdict to [e-mail].

What Porter1

Didn’t Have to Teach

ONCE upon a time, the industrial belt north of Calcutta was a beehive of activity.

Starting with Hind Motors, the home of an automobile plant, the belt stretched on GT Road, that is National Highway Number 1, to Durgapur, where a 2.5 million tonne steel, a smaller Alloy steel and a large AVB manufacturing plant were thriving.

Beyond, the road continued towards Chittaranjan, which had the biggest locomotive manufacturing facility in the country and a somewhat aged medium-size steel plant, then took a dogleg to Dhanbad, the coal capital of India, and eventually reached Sindri, where the largest fertilizer production complex in this part of the world had started operating.

Howrah, the southern tip of this industrial belt, just across the Hooghly river from Calcutta, was to become the hub for a number of small- and medium-size companies which set up foundries and machine shops to manufacture sundry parts, fittings and fixtures to meet the projected demand from these industrial behemoths.

One such unit, Bengal United Company, produced a range of pipeline valves.

When I joined the company as an apprentice, courtesy its owner, my brother-in-law, I was fresh out of college armed with a degree in arts. In ‘them days’ it was de rigueur for students in Calcutta to be steeped in coffeehouse versions of Marxism, swear by existentialism as spouted by Satre and Camus and vilify commerce as the greed index of the hoi polloi, to be avoided till such time making a living from commerce became unavoidable.

But naturally, I was blissfully unconcerned about why and what had made Binaca toothpaste, Colgate toothbrushes, Pears soap, Charminar cigarettes and many other such products integral parts of my life. I hadn’t, like most other consumers of my generation, heard of Brand Power. We knew names of what we used and rarely tried anything else, more out of inertia than as a result of conscious capitulation to the wiles of advertising and the odd little freebies that came inside cartons, often a pleasant surprise.

For example, the Binaca charms were collectible and tradable trinkets from my school days, but we never thought about the nameless genius who put those in as a seductive ploy to hook us on. Much later would I appreciate that the decision to put in those charming little charms in Binaca toothpaste cartons was a result of a complex process beginning with understanding our young minds and culminating in an idea that would keep us beholden. And be so enamoured by this process that I ended up as a member of the marketing fraternity, the nameless geniuses that make names of products invade and occupy the deepest recesses of consumer minds. But then I am getting ahead of myself.

Coming back to Bengal United Company, the valves that we manufactured mirrored those of Glenfield Kennedy, a premier British manufacturer of quality valves. Our factory, I am sure, was not a patch on what the original GK factory was, housed as it was in ramshackle sheds equipped with furnaces, lathes and milling machines well past their use by dates. But the owner was an entrepreneur par excellence, a master of asset utilization and hard nosed about the sharp end of the business that is, sales. The process began with producing very high quality glossy brochures which emphasized the conformity of its products’ design and quality to international specifications such as British standards, American standards and, of course, Indian standards. Our brochures were way ahead of what our competitors had in terms of print and paper quality and featured exhaustive details of our products, including excellent full and cross-section photographs.

My job as the sole sales representative of the company was to mail these brochures to design engineers and architects of various companies engaged in project work in the area, and then follow up with personal visits to try and get some orders for our range of valves.

Those were real primitive days, no e-mails, no mobiles, no smses, in fact very little chance of a dial-up phone connection to set up prior appointments. The net result was long waits at receptions when the concerned engineer had to find time to meet many unexpected visitors trying to sell their wares.

Those were also days of no photocopiers, no faxes, only snail mail and telexes, that too if the phone line was up and running. Warming the reception benches I often thought about the plight of the poor engineers and their secretaries churning out tender documents and RFPs (requests for proposals) with specification attachments that often ran into reams of paper. Often the same specification sheets would be repeatedly typed out to go out with different RFPs, a job I am sure secretaries were not too thrilled about.

In one such meeting I pointed out to a project engineer that our brochures were so detailed that he could easily specify our valves in the tender documents instead of having to write elaborate spec sheets every time. As luck would have it, he thought it was a good timesaving device and agreed.

Some more project engineers followed suit. Thereafter, my job became very easy. No more discussions on specs, and other such tedious details. All I had to do was agree on price – a variable dependent on the buyer’s ego and volumes – delivery and payment schedules.

Thus BUCO graduated from being an acronym of a small enterprise making valves to become the BUCO brand of valves. And I began to relish the power of branding.

My appreciation of Brand Power increased manifold when I joined an FMCG multinational a couple of years later. And it was a particularly painful lesson, for this time around I was at the receiving end.

As the brand manager for a brand of toothpaste languishing at the bottom of market share charts, I was not exactly a happy camper. Increasing penetration among toothpaste users and the share of the brand I was handling proved to be a task well beyond what the company and I could conjure up as aggressive trial, purchase and repurchase strategies.

Brand loyalty was an impenetrable wall, almost as if it was built into the genes of the consumer. Often it would seem that a Colgate toothpaste user would rather suffer from halitosis than use the brand I was peddling! We even had the mortification of discovering unused tubes of our toothpaste in waste bins of households given free samples.

Believe me, those were nightmare days. No matter what R&D dished out, and no matter how well the new formulations fared in blind tests against the leaders, the moment these all-conquering pastes were squeezed into a tube bearing our brand, they became instant pariahs. Despite our collective wisdom built upon the multinational pedigree of our senior management team we failed to crack this resistance. We followed the collective wisdom spelt out in UPGA, the Unilever Plan for Good Advertising and Thomsons’ T-Plan in providing some gravitas to our brand and upped our advertising and marketing spend well beyond prudent levels, but to no avail.

Often strategy sessions would end up with our team saying silent prayers wishing the Colgate factory would be struck down by lightning or at least have a prolonged worker strike. And we would stream out, exhausted, for a cup of coffee at the next door cafŽ to ponder the origins of the mystique of Brand Power and speculate on whether we would ever find the Achilles heel of a well-entrenched brand.

2 The Brand Build-up

THE 9 September 1658 edition of The Gazette of London is of interest to the students of political history for it carried the news of the death of the Lord Protector, Oliver Cromwell.

Tucked away in a corner of the same edition was a small advertisement proclaiming:

That excellent and by all physicians approved China drink called by the Chinaans teha, by other nations tay alias tea is sold at the Sultaness Head Copphee house in Sweetings Rents, by the Royal Exchange,London.¹

This edition of the Gazette is equally interesting to students of business history, for the words may well have been the very first mass-medium advertisement for a product.

The owner of Sultaness Head, a small coffeehouse in what would have been (then) downtown London, had bought large stocks of the new wonder beverage imported from China at some premium. He was obviously convinced a mere announcement of the arrival of ‘China Tcha, Tay or Tee’ for sale at his premises would be the unique selling proposition that would pull customers away from other coffeehouses. His gamble paid off. Not only did Sultaness Head’s sales soar, but it also appeared to give an enormous fillip to the fledgling coffeehouse industry.

Tea went on to become such a popular beverage that tavern keepers wrung their hands in despair as customers deserted them in droves. The government of the day reportedly was so concerned by the loss of revenue from the sales of beer and liquor that King Charles II saw it fit to pass a proclamation in 1675 forbidding sales of tea and other beverages from people’s homes and privately owned coffeehouses. Legend has it that the popular outrage against this decree was so vocal that the authorities prudently decided not to enforce it, and sales of tea from public coffee and specialized tea houses continued merrily. By the end of the century there were more than 500 coffeehouses in London selling tea.

The potency of such advertising in increasing business manifold couldnotanddidnotgounnoticedbythevendorsofothermerchandise. Soon the bakers, the butchers and the candlestickmakers followed suit in putting distinct identities on their produce for they wanted to capitalize on the new phenomenon of extended distribution that allowed some enterprising traders to carry products well beyond the home base of these producers and manufacturers. Rich red ripe turnips, I would imagine, became known as Mr John’s turnips and the infamous rat trap became famous as the careful handiwork of Mr James, the blacksmith from Kilburn, and so on.

Understandably, in the early days proprietary names linking the product to the designer, manufacturer, producer, trader or the patent holder and the resultant goodwill were the customary identities and these were promoted in a number of ways – from town criers to market stalls, hand-painted posters to mass-printed hand bills, newspaper advertisements to home-to-home demonstrations.

Over the next couple of hundred years the markets grew steadily and in due course some of the proprietary names became nationally recognized brands. Some of these proprietary names have gone on to become internationally known brands – Macleans, Heinz, Grant, Colgate, Schweppes, Ford, John Deere, Otis, Benz, Johnson & Johnson, Pierre Cardin, Hugo Boss, to name just a few. India’s house of Tata is on the threshold of such global recognition.

Inevitably some of these pioneers ventured into new product fields and they needed separate identities for the different product categories, or different products in the same category, which they developed.

Thus when Proctor, a candlemaker, and Gamble, a soapmaker, teamed up to make a high quality soap they named it Ivory – a name that evoked very positive images supported by the ivory white appearance of the soap. Proctor & Gamble’s expertise in making a near-white soap was unique enough to give them a major competitive edge and Proctor & Gamble wasted no time to make it a nationally distributed brand supported by substantial advertising and promotional support.

Proctor & Gamble are certainly one of the early believers in Brand Power as evidenced by the large investments they made in making Ivory a high-profile power brand. They also understood the need for special attention to build brands and are widely credited with inventing the concept of Brand Management – a manager wholly responsible for the health of the brand and empowered to act as a mini-CEO for the brand within the company.

Corporations have since spent billions of dollars to promote the sales of their products and building brands.

Some brands have become so dominant in their category and so durable at times that such names have even become generic. Hoover is a case in point, people still Hoover their