Monday, December 01, 2008

Carona : RIP 1953-2003

Brand : Carona
Company : Carona Ltd

Brand Analysis Count : 361

Carona was a heritage brand of India which was once the second largest footwear company in India. The brand is now no more. Carona is one of those brands which could not withstand the competition which came after 1991.

Carona was a brand which thrived during the license raj. The brand thrived along with Bata. Infact Carona was fighting head on with the market leader Bata. In my home town , Carona store was just opposite to the Bata store. There were only two choices for quality footwear Bata and Carona.

Carona in a way imitated Bata in every possible manner . The shops and the products were extremely similar. When Bata launches one style, Carona quickly followed suit. Both Bata and Carona was instrumental in popularising canvas shoes in India. These shoes was a rage among kids at that time .

In 1992, Carona tried to tap the premium segment by launching the German sports shoe brand Puma in the Indian market. This was to counter the popular Power , Northstar and Hush Puppies brand from Bata.

Carona made a big mistake while launching Puma. The company felt that the Indian consumers will fall for the global brand . The Puma brand was priced above Rs 600. At that time the Bata brands like Power and Northstar was retailing in the range of Rs 200 -300. Puma was a big flop in the Indian market because of wrong pricing. The joint agreement was revoked by Puma in 1998.

The environment changed drastically during late 90's with the market opening up. All the footwear companies faced the issue of tough competition and increased costs. The cost was primarily attributed to the heavy workforce that these companies had.

New brands like Liberty, Action, Lakhani etc began to corner the market with new designs and fashion. Foreign brands like Nike ,Reebok and Adidas began to market aggressively which further worsened the position of Carona.

Both Bata and Carona went in for big trouble those days. Bata had the backing of their foreign parent which helped them sail through the restructuring exercise. Carona did not had that luxury.Bata was able to sustain itself by launching new models at affordable price ranges. But Carona was not able to excite the market with new launches. Both Bata and Carona had its own showrooms which became expensive to maintain. .Carona went in to BIFR fold in 1998.

In 2003, BIFR recommended closing down of Carona. BIFR noted that Carona Management did not have the will or the capacity to sustain the company. Carona went into eternal sleep in 2003. Carona was a brand that failed because of mismanagement. Somewhere the company lost its control over the costs. It failed to understand the competition and respond to it.