Friday, June 23, 2017

Mahindra e2o plus : Be City Smart

Brand: Mahindra e2o
Company: Mahindra Rise

Brand Analysis Count: # 576

After the buying the Reva company from Chetan Maini in 2010, Mahindra tried to infuse the much-needed expertise and capital into the electric car company.One of the first things that Mahindra did was to rebrand the Reva cars to e2o.

The first e20 was launched in 2013 replacing the two door Reva car. The auto world was looking for some kind of revolution in the electric car segment when Mahindra took over the Reva company. But alas the status quo remains even today.

In 2016, the company retired the two door e2o and launched the four-door hatch branded as e2o plus. The change reflected the lukewarm response to the two-door car.e2o plus is a standard electric hatchback which looks more like a normal car where the earlier Reva and e2o looked more like a toy car. The company feels that the changes will fuel more consumer interest and adoption.

But odds are stacked against the electric car as of now in India. Despite the higher fuel cost and increased emissions, the government has not looked at making the electric vehicle market - its priority. The infrastructure for EV like charging stations are not existing in India. However, the silver lining is the stated objective of the Indian government to have 100% EV nation by 2030. Moreover, the government also plan to fund 60% of R&D expenses in this field to reduce the cost of technology.

So in one way, the path looks bright but the current market and marketing condition for e2o plus looks bleak. The price is the villain. The brand is priced between 6.3 lakh to 10lakh and there is a huge replacement cost of around Rs 3 lakh for the battery in 5 years. Although the cost of running the car is dirt cheap, the cost of ownership together with the battery replacement cost makes the car unviable purchase for a normal buyer.
e2o Plus is positioned as a city car. The brand is banking on the low running cost, non-polluting nature as the USPs.

Even if a consumer is genuinely interested in buying this car, the economics never works out in favor. The only way forward is to hope that the government will lend a hand in helping to reduce the cost of the car. There are other innovative business models that have emerged around the EV ecosystem. Notable is the Bangalore-based Lithium Urban-Tech which provides EV based transporting solutions to companies which will help firms reduced their carbon footprints. There are also reports of Ola creating a fleet of EV taxis. These emerging models will probably act as critical lifeline support for this category as a whole.
However, a breakthrough in the battery technology is going to be the savior for EV's future globally.

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Sunday, June 11, 2017

Maruti Suzuki Dzire : From Sub-brand to on its Own

Brand: Dzire
Company: Maruti Suzuki

Brand Analysis Count: # 575

From Maruti Suzuki Swift Dzire to Maruti Suzuki Dzire, the brand had come a long way. Launched in 2008 as a reaction to the uptick in compact sedan sales, this sub-brand became the second largest selling brand the company's portfolio contributing 14% of the domestic sales. So far 1.38 million Dzires were sold in the country.

The brand launched as a sub-brand of the best selling hatchback Swift, the brand easily caught the fancy of the sedan-loving consumers of India. Dzire in all sense was a Swift with a boot. But customers loved the car.

In a brand promotion perspective, there was nothing remarkable about the brand's communication. There were regular campaigns for the brand which focused more on the " Desirability "  factor. The focus of the ads was to lure a trade-up to a bigger car. 

The major factor that pulled customers to Swift Dzire was the practicality. The car gave the performance of Swift with a bonus of a boot. However, on the design front, it was not aesthetically perfect. 

The success of compact sedans which was largely aided by the tax- rebate on sub 4meter cars, caught the fancy of all the car makers and most brands started launching their versions in this segment. The cars became better looking and proportionate and not like the hatchback+boot kind of design.

This has probably prompted the market leader to look at Dzire in a different light. The sub-brand not only got promoted as an independent brand but also got a brand new design. Interestingly the new Dzire shares the design (oops !) with new Swift but was launched much ahead of the new Swift. 
Although the front of the new Dzire looks very classy, the boot still derives the design cues of the older version which is a letdown.  One has to see the new Swift to make a judgment whether the new Dzire is entirely new or not.

However, from the branding perspective, we have one more example of a sub-brand becoming a standalone brand and Dzire truly deserves that status. 

Friday, May 19, 2017

Brand Update : Frooti extends to Frooti Fizz

In a very surprising move this summer, Frooti decided to extend itself into Fizz category with the launch of Frooti Fizz. The fruit + fizz category was created by Parle Agro through Appy Fizz in 2005.
The brand had a very high profile launch piggy banking on the brand ambassador Alia Bhatt. Now Parle Agro have SRK, Priyanka Chopra and Alia Bhatt endorsing its brands. That also is a shift from the earlier promotional strategy which was essentially not revolving around a celebrity. 

The new launch is interesting in the sense that why should a brand like Frooti extend to a category which is significantly different in terms of the most important category attribute -Taste. Frooti is the market leader in the category and the brand is worth around 600 crores. Fruit + Fizz category is a niche category now. The brand owners feel that customers are shifting from artificially carbonated drinks to other forms which are perceived to be more healthy. So the Fizz category may see an interest from the mainstream carbonated drink customers and eventually grow in size. Frooti with its brand equity would be able to drive more customers into the category. 

Another reason is to bring in renewed interest into the brand. Frooti being a brand which has been in the market since 1985 wants to rejuvenate the brand equity and stay young and relevant. One way to stay relevant is to keep reinventing and experimenting. This launch is also such an effort to keep the brand innovating and taking risks and explore newer pastures. 

A lot of success of Frooti Fizz would depend on the taste factor. The nature of the Fizz category was that it was suited for occasional indulgence and not for regular consumption ( personal opinion !). Frooti Fizz would be aiming to change that. The launch ad tries to create a Yo image for the brand. However, I cannot read much about the brand in the advertisement except the presence of vibrant colors and the brand ambassador.
Frooti has taken a risky step by extending into a different sub-category. I am not a fan of extensions, however, Frooti may benefit from the additional promotional push and consumer interest aided by this Rs 100 crore media blitz. 

Monday, March 27, 2017

Brand Update : What happened to LMN ?

Remember LMN?

I was listening to a news regarding the launch of Frooti Fizz last day and suddenly remembered a very hyped brand LMN from Parle Agro. After campaign blast during the launch in 2008 and repositioning in 2009, the brand went to silence.

My guess is that the brand got a silent burial soon after the relaunch. There is no mention of the brand in the Parle Agro website also. What is sad is that LMN was such a powerful brand name, the company was not able to capitalize the brand name.
The second factor is the promotion. Parle is a company ( in my opinion) which does only seasonal bursts of promotion. Even for its bread and butter Frooti, This seasonal spurts of promotion does not augur well for a new brand that too in highly competitive market.
The third factor is the positioning. Although the brand's initial campaign was artistically good, it did not resonate well with the target audience.
So till Parle decides to relaunch LMN, May it rest in peace.

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Tuesday, February 07, 2017

Tata Motors does a TAMO

Brand: TAMO
Company : Tata Motors

Brand Analysis Count: # 574

On February 2, 2017, Tata Motors announced the launch of a new sub-brand TAMO. According to the Tata Motors website, TAMO  will be 
TAMO as a new, separated vertical will operate in the first step on a low volume, low investment model to provide fast tracked proves of technologies and concepts.
This is a significant move for Tata Motors who has been trying all sorts of strategy to move up the value chain. The Tata Motors has been stuck with the utility vehicle maker tag in the Indian market for long. The perception has affected the premium brands like Aria, Safari etc in getting customer interest and adoption. 

 My preliminary understanding is that Tata Motors will use TAMO to launch high-end niche products like the sports car, luxury sedans etc to break away from the existing perception of a low-cost utility car maker. Tata Motors probably is trying to adapt the much-discussed strategy of Japanese carmaker's strategy of entering the USA premium market through new brands like Accura, Infinity etc.

But in all reports about TAMO and even in the company website, the TAMO brand is categorized as a sub-brand. If Tata Motors is any way serious about positioning TAMO different from the existing perception of Tata Motors, the sub-brand strategy is not a wise move.

Sub-brands are almost always used alongside a parent brand. So if TAMO is a sub-brand, it would be endorsed by Tata Motors. So if TAMO's main purpose is to break away from Tata's existing image, the sub-brand strategy will not work.
On the other hand, if Tata wants to launch products like sports car using a sub-brand strategy, then I wonder whether customers would really be open to paying a premium for a Tata car. A parallel can be drawn with Maruti Suzuki launching a premium distribution network Nexa to launch its premium cars but later diluted the premium by adding cars like Ignis which starts at Rs 5 lakh.

One bold move would be that TAMO launched as an independent brand of niche products without any endorsement from Tata Motors. It's too early to comment on how Tata Motors plan to position TAMO, but that would be a story worth watching for.

Tuesday, January 24, 2017

Brand Update : Xenon Updates to Xenon Yodha

Tata Motors launched Xenon in 2008. When the brand was launched, it was positioned as a lifestyle pick-up truck. Nine years down the line, the brand has grounded itself as a pickup truck. Tata Motors has always been thinking ahead of times.In 2008, Xenon was trying to create a new market for urban pickup trucks which are very popular in western world. This was targeting people who owned small businesses or adventurers who would like to travel with a lot of stuff. 

But somehow the market was not warming up to Xenon to the extent which Tata Motors expected. The product is in a niche market. Now suddenly there is a renewed interest in the segment resulting from the launch of Isuzu D-Max pickup truck. The launch of Isuzu may renew a lot of interest in the segment which has very few brands like Mahindra Scorpio Getaway and Xenon.

In terms of branding, what is interesting is that Xenon has become more Desi in the new avatar. The relaunch of Xenon is now as Xenon Yodha. The positioning also has changed from a lifestyle product to a utility vehicle. That is a big shift as far as the brand is concerned. The ad features the brand ambassador Akshay Kumar who now endorses all the commercial vehicles of Tata Motors. 

Another interesting thing is that Isuzu has positioned its D-Max as a lifestyle pickup rather than a utility vehicle. One of the reasons for the slow offtake of this lifestyle pickup truck is the government regulations probably insists that these trucks can only be registered as commercial vehicles. A twin cab pickup truck costs more than 10 lakhs and the value for money proposition does not match up for a non-commercial use.