Speed : High Performance Petrol

Brand : Speed
Company: BPCL
Agency: Saatchi & Saatchi

Brand Count : 187

Speed is India's first branded petrol.Launched in 2002 by Bharat Petroleum Corporation ( BPCL) , the brand assured in the concept of positioning and differentiation in the Petroleum marketing which was by nature a commodity.

Speed is marketed as a high performance petrol. Speed is the blend of petrol with high speed additives sourced from Chevron Texaco. The additives are expected to increase the performance of the vehicle.
The branding of petrol is more difficult than any other products because of the following reasons:
a. The customers are very price sensitive. With the petrol prices moving upwards always, spending a premium for branded petrol is a tough call for a customer.
b. There is no tangible benefit that branded petrol can offer to the customer. The advantage of using Speed will not be visible to the customer at the outset. The change may have to be noticed on the performance of the vehicle .

In that sense, Speed has been very successful in creating a niche in this market. The brand is said to be contributing 25% of the total petrol sales of BPCL. Speed is said to have 50% share in the branded petrol segment.
BPCL has carefully nurtured this brand. The brand name itself gives a headstart to the acceptability for the brand since Speed is linked to Performance. Speed is positioned as High Performance Petrol. The company has roped in Narain Karthikeyan as its brand ambassador. The TVCs and the print and outdoors reinforced the positioning of the brand as a performance booster. Narain's was a right choice for the brand since he personifies performance driving in India.

Speed has competition from Indian Oil brand: Extra Premium. Besides using Narain as its brand ambassador, BP also has other campaigns promoting the brand on performance . Speed also extended itself to include Diesel fuel under the Hi-Speed diesel brand.

Even before the launch of branded petrol, BP had initiated a corporate campaign " Pure For Sure" to position the company as one that provides the Purest Petrol/Diesel.The campaign was aimed at promoting retail outlets selling fuels. Another corporate campaign was " Energising Lives" aimed at raising the corporate image beyond fuel retailing. These moves were to preempt the competition arising out from private players like Reliance Industries entering the fuel retailing segment.
With fuel prices touching new heights and with customers looking for alternate fuel options, it will be tough for Speed to convince the customer to pay a premium for the brand.

Related topic
Branding a commodity

Source:agencyfaqs,businessline
image source: agencyfaqs

Nestle Fresh N Natural Dahi : Branding A Commodity

Brand : Fresh N Natural
Company: Nestle
Agency : O&M

Brand Count : 172

Nestle Fresh N Natural dahi is a bold step by Nestle to brand the commodity called Dahi( curd). 2006 saw the high profile re-launch of this product . Nestle dahi was launched in 2001. The reason behind this move to enter into a tough commodity business is prompted by the size of the market. Dahi ( Hindi term for Curd) is the second largest form of milk usage following tea and coffee usage in households. The estimated consumption of curd is a whopping 2200 MT a day i.e. in revenue terms Rs 4.5 crore a day . That makes the market worth Rs 1600 crores. The market is largely dominated by regional players and more than that households make their own curd using milk. The business sense that prompted Nestle to enter this segment is that there is no national player in the market, although Amul has serious plans for the segment.

Nestle has launched the brand with a positioning based on the taste. The tagline was ‘ Jumm gaya Taste” meaning “ Great taste. The launch was a soft one and was concentrated on Delhi. The competition was in the form of Mother Diary and Amul.In 2002 Nestle launched a value added variant in the form of Fruit n Dahi.
2006 saw the relaunch of this brand on a different positioning. The brand is positioned as a calcium rich and creamy product with lot of emotions added to it. The brand is following the typical technique of differentiating by value addition ( rich creamy and calcium rich) and emotion ( pure, love ). The brand is also having raita ( another common Indian curd based dish).The relaunch is also limited to metros because of supply constraints.

This is a bold move by Nestle to enter into a highly commoditised market. Here the brand faces stiff competition from tradition rather than other companies. The changing psychographics of the Indian consumer may aid the brand. The lack of time to prepare the perfect dahi may prompt Indian consumer to stock this brand in the house. The longer shelf life of this brand may also come to help. But the task is not enviable in the sense that it takes lot of money and patience to change Indian consumer’s habits.

Source: magindia,nestle.in,agencyfaqs,businessline

Tata Salt: Salt Of The Nation

Brand : Tata Salt
Company: Tata Chemicals
Agency: Bates

Brand Count :155

Tata salt is India's first branded salt. The story of this brand is interesting because the brand came as bye product. Tata salt was launched in 1983. Tata Chemicals has their largest integrated chemical plant in Mithapur. The soda ash plant needed fresh water for their boilers. Hence to supply fresh water, the company started purifying sea water and it created high quality salt as a bye product in the process. This coincided with the government campaign with the support of UNICEF for promoting Iodised salt since iodine deficiency was a serious issue haunting the children's health.
This environment gave birth of one of the super brands and a classic case of branding a commodity in the Indian market.

The Indian salt market is estimated to be around Rs 1 Billion. The market is dominated by unbranded players. Tata salt have a market share of around 40% in the branded segment and 18% in the total market. The product salt is a low involvement and low value product with little scope of differentiation. Tata salt had the first mover advantage and was able to consolidate its position in the market thorough brand building.

1990 saw organised players eyeing the market. Captain Cook salt was launched in the market taking the " free flowing " feature as a differentiating factor. 1996 saw HLL extending its Annapurna brand to salts and positioning its brand on the platform of health and iodine content. 2001 saw the high profile launch of Dandi salt from Kunwar Ajay sari fame.Still 70% of the market is dominated by unbranded players.

Tata salt started its life positioning on the rational platform of purity. Since the corporate brand had the value of Trust engrossed in Indian consumer's mind, Tata salt was eagerly owned by the consumers. One of the major factors that accelerated the growth of branded salt and Tata salt was the effective campaign by the government to promote iodised salt. The campaign penetrated the market to as deep as 20% and the first mover Tata Salt benefited most out of it.

2002 saw the repositioning of Tata Salt on the platform of emotion. The brand owners felt that they should rise above the rational differentiation and try to emotionally influence the consumers. Hence Tata salt adopted its new tagline " Desh ka namak" translated " Salt of the nation". The brand is trying to associate itself to the nationalistic feeling of the consumers and is trying to fill a passion towards the brand. It is a herculean task for a brand that is in a category which is low involvement and low priced. To create involvement in such a category will be a tough task . But the campaign has raised the brand to new heights in terms of market share. Since customers usually are brand loyal and tend to use the same brand of salt every time ( convenience factor) , such high decibel campaigns helps in strong brand recall.

But the long term view of this category is challenging because the scope of differentiation has not been sustainable. There has not been any serious product development these years and this can recommoditise the category.The brand owners may have to think about value additions in the marketing mix to capture the 70% of unbranded segment.

source:tatasalt, superbrand, businessline, agencyfaqs,domainb

Parry's Sugar : Branding A Commodity

Brand : Parry's Sugar
Company: EID Parry
Agency: JWT

Brand Count : 152

Indian sugar industry is worth a whopping Rs 25000 crore. Although India is the second largest producer of sugar in the world, the percapita consumption is low at 18 kg.Unlike the Salt industry which saw many successful branded players, the branded sugars were not that successful.

Sugar branding was initiated around 6 years ago by players like Mawana sugars and Dhampur sugars. The first movers got the advantage and these players now have a 30 percent market share in the branded sugar segment. November 2004 saw EID Parrys launching their brand Parry's Sugar in TamilNadu which is traditionally a big market for sugar.

Although the market size of sugar industry is large, 75% of the sugar is consumed by large buyers like bakeries, Soft drink manufacturers and confectionery players. Hence most of the marketing is business to business.

The sugar industry has two types of pricing models. One is the free market pricing and the other regulated pricing through public distribution systems. The sugar prices are monitored by the government which sometimes intervene in the market and regulate prices through imports ( if the price increases )

Sugar is viewed by consumers as a commodity and there has not been any initiative from the part of sugar companies to create a differentiation compared to what marketers have done with Salts. Parry's has launced its branded sugar with focus on its quality and purity. It is known fact that the best way to brand a commodity is to focus of these two attributes. Parry's claims to be better refined and pure than the unbranded sugar. Packed in attractive pet bottles, the brand sells at a premium of Rs 4- 6 over the unbranded ones.

The market for sugar is a highly price sensitive one. While in the case of salt, the presence of Iodine was a sufficient differentiation for establishing the brand. The Iodine deficiency could cause thyroid and customers were educated by the government and the salt marketers to prefer iodised salt . But in the case of sugar, those differentiation opportunities were absent. According to a report in Business Today there are different factors that caused the slow start of branded sugars . They are
a.Seasonality : sugar production is seasonal and the entire years productions should be completed within 5-6 months. Hence there is no time for product or process innovations.

b. The sugar play is high volume low margin game. Hence whether marketers are interested in exploring the value added game is another factor that slows down the growth of branded sugar market. While branding involves promotional costs, it will be a tough tradeoff since margin pressure will prevent aggressive brand promotions.
c. The large format retailers have also started selling packed sugar with a premium of 50 paise to Rs 1 making the consumers think that the packed sugars are better refined than the other one.

The main factor behind the branded sugar becoming less popular is the lack of differentiation. The reasons are not compelling for consumers to shell out a premium for branded sugars. Even though Quality and Purity is an issue with the unbranded sugars, even affluent consumers are shying away from paying a premium for branded sugars. More over some branded sugars use sulphur dioxide to refine which is harmful and this type of refining is banned in European countries. It is said that in the west, marketers try to value add this commodity by enriching it with vitamins .
Branding a commodity always has been a challenging task for marketers. Parry's Sugar is a brand to watch and it will be interesting to see how this brand breaks into the consumer psyche.

source:magindia,eidparry,businesstoday,chennaionline,jimtrade,agencyfaqs

HP : Computer Is Personal Again

Brand : HP computers
Company : HP
Agency : Publicis

Brand Count :146

The Indian computer hardware industry is huge and growing. The sheer size of the Indian middleclass is an ample evidence of the huge potential for personal computers in the country. The computer penetration in India is barely 1 percent that makes the market more challenging and attractive.

Although the numbers present a rosy picture, the reality is not as rosy as it seems. The market is dominated by unbranded players and the computer today have a commodity status with brands losing its relevance to a home computer buyer. This has put lot of pressure for the organised player to reduce margins and cost to compete with the unbranded players. In the earlier stages of the evolution of this industry, the factors like reliability and service had given the organised players significant advantage over the unorganised sector. But with the standardisation of products and the outsourced service elements becoming popular, the branded computers lost their edge.
Even with the price war raging , the branded version costs anywhere between 20-30% premium over the unbranded ones.The rate at which the processors and technologies becoming obsolete is forcing the customers to look for cheaper options. The rationale for the customer is simple " The system I buy in 2006 is going to be obsolete in 2007, hence why invest in a branded one?".

HP ( Hewlett Packard) is one of the major players in the organised market in India. This multinational giant have around 20% share in the desktop market. Reports suggest that HCL-the domestic player is leading the market.
In this market which is typically fragmented with chances of differentiations are slim, it takes lot of innovation and marketing skill to survive. That is what HP is currently doing. In June 2006, HP launched its global marketing campaign to reinvent the personal computer industry. The campaign with the tagline " The computer is Personal Again" is an attempt to brand a commodity again. Personal Computers or PC was what we used to call the desktops but later the term lost its charm and we began to use the terms like desktops, laptops and notebooks. These terms were technical terms and was a result of the market becoming more mature and as a result more commoditised.Most of the campaigns by computer manufacturers were focusing on technical specifications and price offers. There were little branding efforts and most of the campaigns were dealer ads funded partly by the manufacturers. Branding was slowly dying and sales promotions were gaining prominance.

HP's new initiative is to bring back the personal nature of the computers. Business Week in a report has detailed that this campaign is intended to position HP as a company that truly understands how central PC's has become to most people's life. The campaign features a " Hand drawn graphic of a Hand" in every ads. Only select products will be highlighted in this campaign and these products will be promoted using only their striking feature. That means that the company is going back to the marketing basics of USP, Positioning and Differentiation. The campaign has also roped in MTV for a Advertiser Funded Programme titled " Meet or Delete" reality show as a part of its 360 degree brand campaign.

The print ads featuring celebrities stand out intheir designs and communication. The sheer beauty and depth of campaign makes it one of the most memorable marketing efforts of recent times. The campaign globally is conceived by Goodby, Silverstein and Partners for the Personal Services Group of HP.
Another beauty of the current positioning platform is the flexibility and creativity that it offers to the marketer. There is ample scope for extending this positioning to all product ranges, new products and across segments.The campaign also gives the marketer an opportunity to experiment with the product, change its design and sometimes make mistakes all in the name of reinventing PC.

With regard to the current theme and its execution in Indian market, the ads mainly is targeted at the affluent middleclass tech savvy customers. The ordinary lot will not understand this communication because the execution of this ad is too complicated for an ordinary buyer to understand. I am not sure whether HP is only aiming at Premium customers ?The success of this campaign will depend a lot on how this strategy is being executed at the customer moments of truth or touchpoints. Is he going to get a personalised attention at the retail level? Will the company follow this strategy with new product ranges and extend this campaign to a mass level?

Whatever be the outcome of this campaign, this will be rated as a classic marketing initiative . As a marketer, I am happy because " Marketing is personal again"

source: businessweek, bbc,expresscomputers, agencyfaqs

Cycle Agarbatti : Everyone has a reason to Pray

Brand: Cycle Agarbatti
Company: N Rangarao and Sons

The Indian Agarbatti market is worth around 1000 crores and is dominated by the unorganised sector.Hardly 15% of this market is branded. This market is unattractive because of high labour cost and lack of possibilities of differentiation and price sensitivity.

Cycle brand is owned by Bangalore based N Rangarao and sons. NRS were pioneers in branding this difficult market and Cycle brand is one of the largest agarbatti brand in India which have a market share of 8%.

Cycle brand was launched in 1948. In this commodity market,Cycle was positioned as a premium agarbatti brand. The brand was trying to differentiate by good packaging, marketing campaigns and quality. Cycle 3-in -one is the most popular which have three different fragrance sets of agarbattis in one pack.

Agarbattis are low involvement products whose purchases are often impulsive. Since there are a few brands in this category, customers makes purchase based on impressive packaging, fragrance or price. Since the price is less, there is little scope for brand loyalty.

Cycle brand has established itself in the market with some good marketing campaigns with emphasis on quality and fragrance. Recently NR sons have launched a new brand Lia with trendy packaging and good advertising.

The market is going to witness some serious marketing action with the entry of ITC. ITC is planning to make this a lifestyle product. ITC is launching a premium brand "Sphriha" which is manufactured by Aurobindo Ashram, Pondicherry. ITC is also launching different brand in various segment viz Nivedan in the mid segment, Ashageet in the lower segment. With lot of cash for marketing, ITC will be a serious threat to Cycle.

The entry of ITC can be a positive factor also since the marketing effort will expand the market and thus Cycle brand will also benefit.

Agarbatti market is a very difficult market to crack because agarbatti is limited to pooja rooms only and there is a religious aspect to the product. The marketers have to take some lessons from "Nightingale" brand ( discussed in my previous blogs) to make an impact. The product have some inherent disadvantage like the residual ash and short burning time. Marketers have to take this brand out of pooja rooms. Theme based marketing can also be tried. Ash-less agarbattis can be an innovation worth thinking provided that attribute is considered important by the consumers. Healthy fumes can be used as a strategy to attack the lower priced incense sticks warning the consumers of health hazard of using unbranded agarbattis.

This market is worth watching for because it is a challenge for marketers to establish a value proposition in a commodity market.

Nightingale : Experience The Finest In Paper

Brand : Nightingale
Company : Srinivas Fine Arts

Nightingale is a super brand ( my choice). There has been lot of debates and thinking about how to market a commodity. Want an answer? Study this brand. Nightingale has carefully built one of the best brands in an industry dominated by unorganized sector.Nightingale is the brand owned by Srinivas Fine Arts (SFA). SFA had a humble beginning. Started in 1964 by Chockalingam and Brothers, as a print trading company in Sivakasi, SFA have now become a global player with a presence in 5 continents. SFA later expanded their business from print production of textile labels to maps and graphs. In 1974 SFA started its own paper trading business. In 1992, it expanded to packaging, soaps and matches.In 1990's SFA introduced the Nightingale brand to the world.

The Indian stationery market is estimated to be around 5000 crores with the organized market accounting to around 500 crores. Nightingale now produces a wide range of products from Diaries to notebooks and journals.

Nightingale right from the beginning carefully positioned itself as a premium brand. The market for diaries was not hot and no effort on branding was visible. I remember only one player : Eagle brand for diaries and notebooks.

Nightingale changed all that. It has created and now owns the premium end of the diaries and notebooks with a clear market and product strategy.
Nightingale brand is built on Innovation , Quality and Image. The brand has carefully segmented the premium segment of the Diary market. IT has also ensured that the quality will be the major focus. During the early days, there was not much focus on the quality aspect for these kinds of products. It was basically a functional or utility product. Nightingale changed that perception and positioned the diaries as a lifestyle product.

Besides quality, Innovation was the factor that was crucial in branding a commodity. Nightingale based its product not only on functionality but also on concepts. The diaries and notebooks are concept oriented. For example, there are Nightingale diaries like Religious diaries (Nightingale was the first one to come out with a Christian diary), Environmental Diaries, Notebooks which are based on personalities, Diaries that have cartoons and quotes, Vedic diaries etc. Altogether there are 264 varieties of diaries from Nightingale.
Nightingale was the first brand to have diaries for various professionals like engineers, doctors which had special sections useful for these professionals.
Nightingale also markets its most expensive diary “ Silver Oak “ which is priced at Rs 57000. This undated diary has 140 gm silver ornamentation and designed by David Sarac. Already the corporate have grabbed this product for corporate gifting.

Let us look at how carefully Nightingale crafts each of the products. Take the case of a product called Layflat notebook. The product have long durability , It maximizes the use of space and have a special ruling and comes with a page marker. Each of the products has some qualities that make it worthy of a premium.

Innovations like a five year diary, undated diaries, theme based diaries personal journals like journal to write about your dreams, and Fashion diaries have made this brand a lifestyle brand.

With Nightingale , experience the finest in branding....

Parachute : Branding a commodity.

Brand : Parachute
Company: Marico
Agency:Ambience Publicis

This is a success story of branding of a commodity. Hair oils and its use are deeply ingrained in to the Indian Psyche. This is a 1500 crore industry which is dominated by unbranded oils. The branded category accounts to around 600 crore. The majority of the hair oil segment is occupied by Coconut oil.

This is a market that have very low entry barrier and that is the reason why the market is dominated by unbranded oils. Marico in early 1990's made a bold step in launching a brand in this segment. Paracute manufactured by Bombay Oil Mills was acquired by Marico in 1990's. Marico was a sister concern of Bombay Oil Mills.

Parachute is the market leader in the branded hair oil market with a market share of around 53%. Marico has positioned Parachute in the platform of purity. This focus on purity clearly differentiated the product from the rest of the unbranded oils .The purity was reinforced by careful packaging and communication. The brand was established emphasising Caring and Mother - Daughter relationship.Parachute knew the pulse of the urban market and emphasised that the oil is non greasy and prompted the TG to experience the brand

During the early 2000's the market witnessed a shift. Marico found that the market for hair oil is degrowing, because the consumer preferences are changing. The youth now didnt want to have Oil - on- their hair look. This prompted Marico to look into the Value Added hair Oil market which was dominated by Dabur Vatika. Parchute's mother brand was also facing competition from Nihar of HLL stable.

Marico decided to depend less on the basic Parchute oil and we saw a series of new product launches. Marico launched Parachute with jasmine fragrance which was well received by the market. Also came Parachute Advansed and Parachute Sampoorna. Parachute Advansed account is with McCann while others are handled by Ambience.

2005 saw a Bold ( or foolish) step from Marico . We saw the launch of Parachute Aftershower hair cream. This is the first non oil product from Parachute . Marico roped in Yuvraj as the brand ambassador . The product is positioned as a Non sticky and with Zingy perfume. The product is launched with the base line " style on every day".

People in Marico and Ambience are better marketing minds than me. But I have doubts about this brand extention. Parachute has been a category leader & almost generic to coconut hair oil. Extending this brand to men's toiletories seem totally out of box or should I say out of mind?
As one of my readers pointed out " there are many financial pressures that outsiders cannot understand" . I do agree to that also.

But when a brand known for its coconut oil, targeted at women and positioned along the mother - daughter relationship, extends it to a men's category, will it survive?

Will men accept a feminine brand? If Marico advertises Parachute for men, will women accept that brand?

Then what is parachute? a coconut oil, after shower for men ? hair oil?
The price is attractive , so men may buy it.
I am confused.......... Am I a target consumer?