Friday, November 28, 2008

The Gateway Hotel : Smart and Sophisticated

Brand : The Gateway
Company : Indian Hotels Company Ltd ( Taj Hotels)

Brand Analysis Count : 360


Following the success of the budget hotel brand Ginger, Tata owned IHCL has launched a new hotel brand The Gateway.

The Gateway is a new contemporary modern hotel aimed at the new generation travelers. The hotel is positioned one level above Ginger and two level below the Taj Residency brand. Gateway is aiming at the business travelers who look for comfort and convenience.

IHCL now has four aiming at different segments
Taj : The high end luxury hotel aimed at the super rich.
Residency : The upscale premium hotel.
Gateway : Medium range hotel
Ginger : Budget

Gateway is positioned as a smart ,upscale, midmarket full service hotel providing hassle free contemporary superior service. The brand aims at perfect service without much fuss .
In the case of hotel industry, the predominant segmentation criterion is based on the room tariffs. IHCL feels that there is a gap between the budget hotel and the Residency brand.
This mid market segment offers maximum potential and consists of business travelers and tourists. The tariffs vary according to the locations but reports say that the range is between Rs 3000-Rs 6000.

During the first phase of the launch, the company plans to rebrand some of its Residency Hotels into Gateway. The company has identified sixteen hotels for the rebranding .

Gateway is trying to have an independent identity which is removed from the Taj brand. IHCL is now planning to retain the Taj brand as its Luxury brand. Hence it had the task of creating the distinct identity for the new brand -Gateway.

The Gateway brand is built on contemporaryness while Taj is rooted in heritage. So in the branding parlance, both these brands are poles apart.
The logo of Gateway is designed by the global design firm Landor Associates which had designed the logo for Ginger. The logo reflects the brand values of modernity and simplicity.

The Gateway hotel has already run a series of print campaigns as a part of its launch. The series of ads feature some offbeat successful personalities like Rahul Bose and Shobha De.
The choice of these celebrities was aimed at positioning the brand as a hotel for the new age successful personalities.
The brand has tried to differentiate itself through careful drafting of its service offering. Inorder to create a better service output, Gateway has divided its offering into seven zones which are
Stay
Hangout
Meet
Work
Workout
Unwind
Explore.

The brand thinks that its customers may have needs in any of these 7 zones.The brand aims to satisfy the customers in all these zones. The brand also offers flexibility like breakfast till 2 pm , option for night workout etc. The chain of Gateway hotels also provides a convenient choice for the frequent travelers. In the segment which Gateway targets, there is a need for such a hotel chain.

Although Gateway is trying to create an independent identity, the endorsement of Taj brand will go a long way in establishing the brand during the initial years.

Wednesday, November 26, 2008

Brand Update : Dabur Chyawanprash

Dabur Chyawanprash has gone in for a major revamp. The look and feel of the brand has changed and so is the brand ambassador. This November, Dabur has decided to change the look and feel of its leading brand Dabur Chyawanprash.

Dabur hold a commanding 60 % share in the Chyawanprash market. The brand has been using Amitabh Bachchan as its brand ambassador. Infact Big B has been endorsing the brand for more than five years now.


Chyawanprash faces a unique perception issue. The brand is perceived to be a health supplement for elders and kids . The younger generation feels that the brand is not relevant for them. Dabur had earlier addressed this issue in their earlier campaign ' Zaroorat Hai ' using the concept of ' role reversal ' .

Although Big B provided huge equity to the brand, the elderly ambassador further reinforced the perception that the product is for older people.

To break this perception, Dabur has come out with a new campaign featuring the new ambassador MS Dhoni. Dhoni is expected to make the brand attractive to the younger generation. The current success of Dhoni as a cricketer and as a captain gives added advantage to the brand.

Dabur has done more than just a new communication. The brand has also changed the packaging. The new packaging with lot of red color symbolises the activity and alertness. The bottle shape also has been made more modern. Chyawanprash also has a new logo which also reinforce the new targeting.

Dabur also has a new tagline for Chywanprash . The brand has done away with the earlier tagline " Zaroorat Hai ". The new tagline is ' Fit Body , Active Mind '. The brand gives the message that to win in life, one needs to have an active mind and a fit body.

The brand is currently running a new campaign in television featuring Dhoni.
Watch the tvc here : Dhoni

As in the case of any successful celebrity, Dhoni also faces the issue of over exposure . He is now sponsoring many brands from textiles to beverages. In the health drinks category he endorses Boost which is a competitor for Chyawanprash in a broader sense.

When I first saw the commercial, I mistook the ad for Boost. Boost also features Dhoni and Sachin as the brand ambassadors. The settings of both the Boost ad and the Chyawanprash ad are quite similar. Both ads even use the same color red as the main anchor. Only at the end of the ad, I realized that it was for Dabur Chyawanprash.

In message formating , it is better to introduce ( identify) the brand early in the campaign while using celebrities. Because the current trend is that most of the celebrities are over leveraged. Customers will associate the celebrity to some other brand if there is late identification of brand in the advertisments.

Professors Brian Sternthal and Angela Lee in the book " Kellogg on Branding " suggests that late identification strategies are used by brands to create a suspense and hence hold the attention of consumers. However, this is a risky strategy since consumers are free to make their own associations throughout the advertisement duration. Presenting the brand name at the end of the ad may not correct the erroneous association. People do not find it worthwhile to put an effort to correct such an association.

The authors say that late ID is useful for those brands where customers have an unfavorable disposition . Here in this case , there is an unfavorable perception that the brand is for elders and kids . But at the same time , the brand ambassador is endorsing a category competitor. Hence in this case, late identification may have little effect than desired.If Dhoni was not endorsing any other health drinks, this campaign could have produced greater results.


How ever, the brand will gain with the association with Dhoni. According the reports, Dabur also retains Amitabh Bachchan . That makes a formidable combination of endorsers for the brand.

Related Brand
Dabur Chyawanprash

Monday, November 24, 2008

Bru : Happiness Begins with Bru

Brand : Bru
Company : Hindustan Unilever
Agency : O & M

Brand Analysis Count : 359


Bru is a power brand from the HUL's stable. A brand which pioneered the instant coffee category in Indian market in 1969 is also an example of many successful marketing practices. According to HUL, Bru is the market leader in coffee segment with a value share of 46.9 %.

Prior to 2004, HUL had many brands in the coffee category. It had Deluxe Green Label and Bru instant as the main brands and small brands like Dilkush, Cafe and Cafe Gold. In 2004, as a part of the power brand strategy, HLL decided to phase out Dilkush and Cafe brands . It then consolidated the coffee brands under the masterbrand Bru.

Bru before becoming the family brand was positioned as a coffee that tasted just like filter coffee. But after the elevation to master brand, Bru took the positioning around happiness.


Bru was synonymous for instant coffee and had an astounding 21% market share in the first year of launch itself. All these years, the brand has been fighting for the numero uno position with Nestle whose iconic Nescafe brand was the market leader. But in 2008, the brand pushed Nescafe to the second position.
Much of the success of Bru can be attributed to following factors

Innovation in new products
Innovation in packaging &
Aggressive campaigns

Nestle lost out because of lethargy. The company failed to consistently invest in its Nescafe brand. I do not seeing any memorable campaigns from Nescafe in recent past. This has cost the brand dearly.

HUL's marketing acumen is vivid in the rise of Bru as the market leader. It has never stopped innovating for this new brand.

Bru was able to give new offerings to customers on a regular basis. One of the recent successful new product was the cappuccino packs. The new flavor gave the brand a new thrust in the market. The new flavors even prompted hardcore tea lovers like me to try out these flavors . The best part was that these cappuccino was available in single serve sachets which prompted consumers to test the flavors.

Another innovation was the cold coffee. Bru launched the cold coffee variants which again captured the attention of the consumers.
These thrusts in new product development and roll out is visible when one visits a super market. The coffee section is full of various flavors and packs of Bru which itself creates a positive vibration for the brand.

Another factor which made Bru successful was the campaigns. The brand is famous for two campaigns. One featuring Amritha Rao was a big hit. The theme revolve around the shy girl wanting to introduce her boyfriend Sagar to her father.
Watch the TVC here : Bru Sagar

Another campaign which was highly popular was the 'little cup' ad. The ad shows the wife announcing the " good news " through a symbolic ' little cup'.
Watch the ad here : bru Little cup

Bru is positioned on the theme of happiness. The brand has the tagline " Happiness begins with Bru ". The positioning and communication has been consistent with the brand's promise of kickstarting one's day with a Bru.

These slice of life ads put Bru in a growth orbit. Consumers started loving the brand for its innovation and campaigns. For the Bru Cappuccino, it had roped in the Bollywood Director Karan Johar to endorse the brand.

Another critical factor that aided Bru's success was the innovation in packaging. The brand made the entry barrier low by launching small affordable SKUs. There are single serve and large packs at different price points making the brand affordable .The brand although is positioned as an aspirational brand is priced affordable thus making it a perfect example of a Masstige brand.

Recently the brand has yet again came out with a customer centric innovation in the form of a flavor lock. Most of the customers worry about losing the flavor of coffee powder once the pack is cut open. The flavor lock is a plastic clip which will lock the flavor from escaping. More than actually locking the flavor, the lock gives a psychological belief that the flavor will not the lost.

This little plastic lock also gives more convenience to the home maker. Typically when buying powders in packs, home makers have to transfer the powder to a container to preserve it for long. This lock effectively eliminates the need for such a container.

Bru is a brand which has reached the commanding position following methodologically all the critical elements for marketing success : customer centric innovation, aggression and new product development

Friday, November 21, 2008

Brand Update : Sprite


On September 2008, Sprite launched a new variant Sprite Xpress with much fanfare. The various news reports celebrated this launch as a packaging innovation which Indian market is witnessing for the first time.

Sprite Xpress is the 350 ml Pet bottle from Sprite. The innovation that the company boast is that this is an " On The Go " Pack. That means that you can carry it with you when you are traveling..

What's new in that ?


According to the Press Release,
"
the new pack is a strategic initiative aimed to build strong connect with the youth. It is designed to offer convenience and adapts to the dynamic and on the move lifestyle of the consumers "

Frankly I did not knew that a simple packaging can do lot of strategic " things " to the consumers.

Coca Cola has been heavily promoting the Sprite Xpress. The variant is being promoted using a long peppy television advertisement .

Watch the campaign here : sprite xpress

The ad is catchy with a good background song . The ad revolves around the theme " outwit to outrun " and have a new tagline ' Ghumo Ghumao'.

The issue with this ad is that the entire foundation of the ad is based in Hindi. The song and the taglines are Hindi. When the ad is to be shown in the South Indian market, the agency will have tough time translating these in local language without losing relevance and sounding funny.


After seeing the ads I couldn't understand the innovation. After a little googling, I finally understood.

The innovation is in the pricing. Sprite was available in three packs : 300 ml glass bottle pack, 500 ml Pet bottle and large one litre Pet bottle.

Now the new pack is 350 ml in Pet bottle priced at Rs 15. The new pack is aimed at those customers who want single use packs while on the move. So offering the single use Pet bottle makes marketing sense.

With regard to the pricing, the new Xpress pack is priced Rs15 . Although psychologically seem to be lower than Rs 20 for 500 ml, in actual sense, the consumer is paying more for less.

In that way Coca Cola is gaining more than Rs 1 per bottle as margin. In a business with wafer thin margins, getting Rs 1 more is nothing but innovation.

That also justifies the extravagant promotion for this variant. The ads have been shot in Malaysia and runs for a full 60 seconds which really costs a bomb at the current advertisement rates.
The true innovation is with regard to the use of OOH media by this brand. According to reports, Sprite has launched a series of 3 D outdoor creatives on various outdoor platforms like elevators, buildings, hoardings etc.

Sprite has to create a big hype around Xpress and brand it as a packaging innovation because it is priced high. As customers , we have to pay more for such kind of " innovations ". The paradox is that this is from a brand which says " No Bakwaas " only seedhi bath ( straight talk !)

On a marketing practice perspective, Sprite has done a good job in launching such a variant. There will be lot of customers especially youngsters who want such single serve bottles which can be taken along with them. The problem with the existing 300 ml glass bottle is that one cannot take it on the go.

According to reports, the company is planning to launch Xpress packs for its brands like Coca Cola, Thums Up, Limca etc.

For customers : you have to be clear about what you are paying for... baki all bakwas

Related brand

Sprite

Wednesday, November 19, 2008

J Hampstead : Nothing but the Best

Brand : J Hampstead
Company : Siyaram
Agency : Percept

Brand Analysis Count : 358


J Hampstead is a brand from the house of Siyaram . J Hampstead is an international brand of worsted textile which was acquired by Siyaram in 1995.

When the brand was launched, it was positioned as a premium suit brand with a price ranging from Rs 1000- 1500 p.m. The high price was because the fabric was imported from Italy. Later the brand went in for local fabric and a price restructuring happened which saw the brand retailing at the range of Rs 500-1000 per meter.

J Hampstead is an interesting brand. I think this is one of the very few brands in the consumer space which have an " Initial " along with the brand name. Besides this trivia, the brand is interesting for its experiments with celebrity endorsements.

According to Financial Express (26 July 2008) the market size for worsted suiting is around Rs 1600 crores.

J Hampstead from the start itself has relied heavily on celebrity endorsements. It is also a brand that was unlucky because in most of the occasions their celebrities got into trouble and the brand had to discontinue the campaign.

The famous endorsers for J Hamptead was the tennis duo Mahesh Bhupati and Leander Paes. These tennis stars were roped in when they were in the peak of their careers. But the personal relationship between Mahesh Bhupati and Leander Paes became sour and led to lot of negative press coverage around their fight. This prompted the brand to take off the campaign featuring these players.

Then came the big gamble. J Hampstead was endorsed by the entire South African cricket team. Instead of choosing a single player, the brand took the entire team as the endorsers. The South African team was considered to be very professional and clean. There were campaign featuring the entire team wearing J Hampstead suitings. But then came the unpredictable misfortune. Hanse Cronje , the celebrated SA captain was accused of match fixing. This forced the brand to shelve the entire campaign.

At one point of time Geoff Boycott also endorsed the brand.
Then for a long period, the brand kept off the celebrity bandwagon.

In 2008, the brand came back with the celebrity endorsement strategy but with a difference. J Hampstead is now endorsed by Ms Priyanka Chopra. I think that its the first time that a male textile brand being endorsed by a female celebrity. ( I am not sure whether any other brand targeting males are endorsed by female celebrity)

According to media reports, the agency feels that such an endorsement will be a communication innovation. The campaign featuring Priyanka has been shot in Paris and is currently on air in most of the channels

Watch the campaign here : J Hampstead

So the question arises whether the strategy of a female celebrity endorsing a suiting brand make sense ?
According to reports, Priyanka Chopra is now the hottest star in bollywood with a huge 'male' fan following. The purpose of this campaign is to create brand recall rather than build a long term brand equity . Hence the logic using Priyanka works in advantage to the brand by tapping the 'huge' fan following. (This is the version of the agency)

The theme of the ads also reflects this thinking. Priyanka getting impressed /fascinated by a hunk wearing J Hampstead. Another ad showing Priyanka ' playing' with the material getting impressed by the stuff.

The brand is being positioned as one for the modern independent stylish gentleman who can easily make an impact on the beautiful ladies. J Hampstead earlier had the tagline of " The world's Finest Fabric ". For the new campaign there is a new tagline " Nothing But the Best ". The brand is currently using both the taglines in the campaign.

The brand is facing competition from the likes of Raymonds and Reid & Taylor. Both these brands have created a clear cut differentiation. So will Priyanka Chopra measure up against Amithabh is the key question.

The brand is also looking at that perspective. Textile brands have roped in who is who of the bollywood. Shah Rukh ( Belmonte) Salman ( Mayur) Big B , all have been booked. Hence why not create a difference by choosing a lady.

Frankly , I am not able to predict whether this strategy will work for the target audience? Honestly I am not impressed by the ads because there is nothing new in what is being said.

There are advantages in using Priyanka Chopra because those who like her will watch the campaign. And if the news reports that she has a huge male fan following is true, then that will be positive although it has to be seen how much of those fans belong to the brand's TG.

What I detest is the desperation of the brand about celebrities. Why should a brand go after a female celebrity when they feel that all male celebrities have been booked by the competitors. Does the brand have an identity on its own ? Suppose all celebrities die, what will J Hampstead do ? Will it kill itself ?

Monday, November 17, 2008

Marketing Funda : Marlboro Friday

On November 12 , 2008 , Honda Motors India shocked the Indian autoworld by offering the biggest discount of 40% for its hybrid Civic. The country's first hybrid car Honda Civic was introduced in the Indian market this June. The launch price of Civic Hybrid was Rs 21.5 Lakh. Now the car is sold at Rs 13.5 Lakh.

Naturally the news was the talk of the town. For two reasons, first was the quantum of discount.It was the largest discount seen in that sector and second was that no body expected a price cut from a car maker like Honda.

Now the reason for the price cut has been officially out . The price cut was to clear the inventory . Honda had expected that the customers will buy the new generation Civic Hybrid for the prohibitive cost of Rs 21.5 Lakh. How ever Indian consumers gave this product a miss.

The huge price did not justify the value offered by the car. For one reason, Indians do not care too much for the eco-friendly proposition. We like eco-friendly cars but not at the cost of Rs 21 lakhs. Infact the hybrid feature was not motivating enough to justify the price. The dampener was the 105% import duty which forced Honda to sell the brand at such a high price.

The Civic Hybrid was imported as a completely built unit . The first shipment of 25o cars reached India this June. So far Honda was able to sell only 30 cars.

For high technology products and also products with " limited edition/Special edition" tags have only limited shelf life. When time passes, their value also erodes. Hence Honda had to sell off the inventory. To add to this problem, another shipment of 250 hybrids were on the way.

Honda maintains that the current discount is applicable for 190 cars only. That means the next lot of hybrids will be costing more.

All these events remind me of the famous Marlboro Friday.

On April 2 1993, Philip Morris which is a global cigarette major cut the price of its flagship brand Marlboro by 20 % in the US market. This sent shocking wave across the consumer market in USA. The stock market reacted violently and Philip Morris stock went down by 23 %. The entire consumer goods stocks fell drastically on that day. The market felt that consumer companies have buckled under the pressure of low-price competitors.

Philip Morris at that time was reeling under the pressure from discount brands . The low priced Cigarette brands was eating away the market share of Marlboro which was the market leader.

The branded cigarette business at that time also faced serious issues like
a. Demarketing by government
b.Restrictions on advertising and promotions.
c.Threat of law suits.
d. Price competition from discount players.

Philip Morris justified the price by saying that the price cut is a part of the major shift in the business strategy for long term growth. Many analysts blasted the company and predicted that the iconic brand status of Marlboro will bite the dust.
Philip Morris argued that it will not be able to withstand if it does not react to the price competition.

The Marlboro price cut was followed by a price restructuring exercise by the company across the product line. While the price of premium brands were reduced, it increased the price of its own low priced brands. The aim was to reduce the gap between the premium brands and the low priced brands.

The price cut was executed initially through sales promotions like coupons and offers like one + one free. Later the discount were made permanent .

The brand felt that once the price differential between premium and low priced brands are reduced, customers will choose the branded ones.

Although for the short -term, Philip Morris suffered revenue loss and share price beating, the strategy proved to be correct. After a year, the price competitors suffered and customers began to buy the brand. Marlboro regained its lost market share and share price of Philip Morris went back to sunny times.
The whole event is now known in the marketing world as Marlboro Friday.


I think that the price cut of Honda in India should be called as by Hybrid Wednesday.

Unlike the Marlboro price cut, Honda Civic price cut is not strategic but tactical. But the price cut throws some relevant marketing questions .

The most important question is about the brand equity. Many think that such a drastic price cut will hamper the brand equity of Honda. Since the price cut is for a specific variant, I don't think that Honda as a brand will suffer. Remember that Honda brand is build on attributes like quality, technology ,innovation etc which are still very relevant .

Another question that arises is the fate of those customers who had bought the car for Rs 21 lakh. Obviously when there is such a drastic price- cut, the existing customers are obviously going to be pissed off. According to reports, Honda is planning to compensate the existing customers although its not legally binding. Since there are only 30 customers who suffered because of price-cut, it makes marketing sense to compensate them because these customers are ' innovators ' who have lot of ' value ' among the target audience.

Although Honda claims that price cut is for 190 cars only , I have serious doubt whether they will be able to sell the next lot of hybrid cars for anything more than 15 lakhs. In a way the brand has fallen into a price range by its own making. It will also be a price benchmark for all those car marketers who have plans to launch their own hybrid cars.

What is interesting is that although Honda has misjudged the pricing during the launch, it had corrected the mismatch swiftly. It takes lot of guts for marketers to admit that they had made a mistake.
Honda quickly acted on the inventory problem and rightly identified the new price. According to reports, with in a day of announcing the price cut, Honda was able to sell a whopping 98 cars. So in a way the entire event help discover the price for such an innovative technology based product.