Koutons : 50% + 40% Off

Brand : Koutons
Company : Koutons Retail India Ltd

Brand Analysis Count : # 483

Koutons is a brand story which has gone sour. This 1000 crore corporate brand is now facing the worst period of its existence- facing mounting debt and bad press regarding the financial position and the stock price moving southward. 

Koutons , the brand owned by Koutons Retail India Ltd was born in 1991. The original name of the company was Charlie Creations which was later rechristened as Koutons. Koutons is both the corporate brand and an individual brand . The company has a range of readymades with the brand name Koutons. Along with it , the company also has other brands of clothings like Charlie Outlaw, Le Femme etc. The current post focuses more on the individual brand.

Koutons Retail is a classic entrepreneurial story. The company was founded by Mr. DPS Kohli. Mr Kohli and his family owned a television manufacturing business which was destroyed during a riot. Mr. Kohli  had to suffer huge financial losses from that even and had to work as an insurance surveyor for long . Later he ventured into the retail textile business.

Koutons grew really fast. The company became India's largest retail apparel chain in a span of 10 years . In 2009, the company had around 1400 Exclusive Brand Outlets (EBO) making it the largest apparel chain. The company had a turnover of around Rs 1000 crore in 2008-2009.

Koutons was a brand built on a very unique strategy - deep discounting. Deep discounting is a pricing strategy where the brand offers huge  ( often mind-blowing) discounts on an unusually high MRP ( Maximum Retail Price) . So the consumers are attracted towards the product seeing the huge discounts which are actually not a discount ( in pure sense). 

Koutons has a popular discount scheme  known as 50% + 40 % off. So there is a 50% off on the MRP and then another 40% off on the discounted price. So  the consumers obviously are delighted to get a shirt with an MRP of Rs 1500 for as low as Rs 450. Another very successful offer was " Buy 4 garments for the price of One ". Seeing this unbelievable offers , consumers flock into the showrooms and buy what ever that is available .

Along with the deep discounting strategy, the brand also invested some money in the brand building.Koutons has the tagline " The way ahead, always " . It had campaigns featuring foreign models and usually the showrooms are located in upmarket malls thus giving the impression that Koutons are a premium brand.  But frankly no one really knows whether Koutons really sells a shirt for Rs 1500. 

But nobody was complaining because consumers got a feeling to getting a good bargain and that is what matters. So this model worked well for the firm for more that 20 years. As usual, 20 years is pretty long time for consumers to learn the discounting model. The sales started drying up and the cost and inventory started building up. More discounts followed and revenues started sliding. The company landed itself into a financial trouble. ( source).

The brand really was able to tap the " value for money " psyche of the Indian consumer. Indian consumers like a good bargain and for long years, the firm was able to capture profit out of it. But the popularity of other discount outlets of established brands and the quality issues of Koutons paved the way for the downside for the brand. According to some newsreports, the company faced the issue of inventory mis-estimates and huge debts. 

I also have bought the brand believing that I got a good bargain later found that I was a victim of a very clever marketing strategy. Often some students ask me whether Koutons will lose its brand equity if it gives discounts like that, assuming that they sell the product at MRP atleast in some outlets. In the case of Koutons, they sell by these discounts.

In the deep discounting model, the brand is secondary. What matters is the  attractiveness of discounts and high media spents announcing the discounts. It is not the brand that pulls the customers but the perceived bargain. Ofcourse the consumers should feel that the brand is aspirational . So it is a kind of a very risky , clever strategy. Project aspirational image and use discounts to pull the consumer in.

Koutons as a company is in financial trouble and the fate of the brand depends on how the company survives the crisis. The deep discounting model will work in a market like India as long as the firm is able to project the aspirational image. It lacks the glamour of brand-building but may work for short-term. In the long term such deep discounting will eventually kill the brand. 

Brand Update : Kara Skincare fights the mighty Hand Kerchief

After a long period of silence, the tissue wipes brand Kara from Aditya Birla Group is back in action. Launched in 2008 with much fanfare, the brand went into a long silence throughout 2010. The product was not even visible in the supermarkets and were silent across media. Now the brand is back with a bang with a new positioning and celebrity power. The brand also had a trademark issues with Dabur's Kaya brand since Kaya also had tissue wipes which was later settled ( source). 

Skincare Wipes are an emerging category in India. We Indians are not yet familiar with the idea of using paper tissue instead of our very own hand kerchief. But this trend is visibly changing with the new generation being open to the idea of carrying tissue instead of the hanky. This is the trend that Kara wanted to see and capitalize.

It can be said that the brand went in for a relaunch. The brand sports a new positioning and a tagline. The new positioning of Kara is very interesting since it pitches itself as an alternative to the ubiquitous hand kerchief. The brand also have roped in two celebrities to endorse - Sharman Joshi and Anushka Sharma.

The brand had moved away from the earlier positioning of " feel good " to hygiene. This is a major shift in the positioning platform of this brand. For that purpose, the brand had pitted against hand kerchief saying that using hand kerchief to wipe the face is a " bad habit " since we use hanky for lot of unhygienic purposes (as highlighted by the ads) .
The ad features these celebrities  highlighting the unhygienic nature of the hanky and encouraging people to use Kara Skincare wipes. The brand is talking about three basic benefits - Cleansing, Nourishing and Deodorizing. Kara Skincare has Cucumber, Aloe Vera and Mint oil  as ingredients to support the claim.

Watch the ads here : Sharman Kara 1, Sharman Kara 2 , Anushka 1 , Anushka 2

The current attempt of Kara is interesting and the brand has the guts to take on the generic competitor hanky head-on. The fact is that many consumers are unaware of the unhygienic nature of hanky and we believe that since it is washed daily , hygiene is taken care of. The ads highlight is issue nicely. The brand currently has adopted the tagline " Face Refresh Karne Ka Specialist "  ( Specialist for refreshing your face !).

The big question is whether the consumers will actually see the tissue wipes as an alternative to hanky - atleast for the use of  wiping the face. The answer is both yes and no. There is a section of our society which already is open to such extra-conscious about the hygiene. Most of the young girls have started using wipes because of convenience factor. These people will adopt the idea first and then there is a chance of more consumers adopting this product.
The brand had earlier tried to position itself  on the feeling good platform highlighting the benefits but consumers did not respond warmly to it. This may have prompted the brand to take an aggressive approach. The direct comparison with hand kerchief will definitely make consumer look at this brand seriously.

Another interesting aspect of Kara's strategy is its focus on both the genders. When launched, Kara was focusing on female segment but now it is explicitly targeting the male segment through Sharman Joshi. The brand also is not projecting itself as a hip-hop brand so that it does not alienate the larger segment of the society . So the brand had put the characters of the ads as common folks .

The strategy of fighting head-on with generic competition is a very risky but bold strategy. Here the brand is trying to create a parity with the hanky . The rationale is that Tissue Wipes is a new category and brand and category competition is not what should be addressed at this stage.
Making this category into a mainstream is the challenge that Kara faces and it has done the homework well.

Related brand
Kara Skincare wipes

Brand Update : Barclaycard RIP ( 2008-2011 ?)

According to newspaper reports, the Barclay's Corporate which runs the credit card business has decided to put Barclaycard on the block. The report further suggest that Barclays is going to scale down its retail operations owing to the bad debts accumulated during recession. The unofficial number of creditcards of Barclays is put at 2.4 Million.

Barclaycard was launched with much fanfare. The brand offered several differentiators which was later matched by other players. The company was in the dilemma of choosing between high risk Vs growth. Finally it decided to sell of the credit-card business and concentrate on other banking domains. 

Credit card brands are a confused lot. On one hand they want the users to splurge  and on the other hand, they worry about bad debts. Greed makes these brands charge exorbitant charges which adds to bad debts. It is a vicious cycle.

Having said that, Barclays had a reasonably good business albeit small in market size. That may bring in some suitors who wanted to scale up their business. Barclaycard failed because the brand lacked the distribution reach which is essential to scale up. The recession add to its voes for fear of accumulating bad debts.

Anyways another brand is going to die. RIP

Related Brand

Barclaycard

News reports

Brand Update : Bajaj Discover Zooms Ahead

It has been almost 6 years since I wrote about Bajaj Discover. A lot happened in these years about the brand. And those development was indeed surprising. Now Bajaj Discover is the second largest selling motorcycle in India . Since the introduction in 2004, the brand has moved through interesting phases to reach the top crossing the one million units sales per annum. 

The brand had a dream start with the endorsement from Jackie Chan. Discover instantly topped interms of awareness and image. The brand was launched as a part of the grand strategy of moving the consumers away from the 100 cc bikes towards more powerful 125 cc bikes. The commuter segment of the Indian motorcycle market was dominated by 100 cc bikes and Hero Honda ruled the segment.

The grand strategy failed and Discover was having tough times. Bajaj experimented heavily with the Discover brand by launching the brand in various engine capacities. Discover was initially launched in 125 CC later in 115 cc, then in 135 cc , then 100 cc and 150 cc. Most of these variants failed in the market. But somehow Bajaj decided to keep the Discover franchise alive. 

The fortune of the Discover brand turned with the launch of  the 100 cc variant. Ironically Bajaj resisted launching any products in that segment and it had the hypothesis that consumers will desert 100 cc m/cycle for more powerful bikes. But it had to bite the bullet and launch the100cc Discover and sales went through the roof.

The discovery of the potential of Discover was through a series of flawed product strategies. The dominant logic of the firm was that the era of 100 cc bikes were over which was a flawed logic. Consumers still found logic in using 100 cc bikes so Hero Honda thrived. 

The company got the positioning right for the 100 cc Discover . The brand talked about mileage ( 100 kmpl ) and that together with the premium image of Discover propelled the sale of the variant.The firm was right in pricing the brand competitively in the market. 

The success of Discover prompted the company to experiment more with the brand. Discover 150 was launched to act as a flanker brand for the premium Pulsar. Now Discover 125 is also being launched . It seems that there is hell lot of money at Bajaj for experimenting with brands.

Bajaj plans to use Discover for the volume game and the focus will be to give the right product mix to the commuter segment which forms the largest chunk of M/cycle market. The 100 cc and 150 cc experiment worked well for the franchise while the rest failed. 

Related brand

Bajaj Discover

World Player : Be a World Player

Brand : World Player
Company : Skumars

Brand Analysis Count : # 482

Another brand which has the potential to shake up the readymade market in India- World Player from Skumars is on the national rollout. But the eternal question remains - Can it meet the potential ?

World Player was launched by Skumars in 2010. It took almost one year for this brand to scale up the presence across the states. It is surprising that a national brand like SKumars would take such a long time to scale up the presence of a brand which has so much potential. 

The brand has a huge potential for two reasons :

• It is endorsed by Sachin Tendulkar.
• It is priced very very competitively.

I am not a big fan of celebrity endorsement strategy and I don't believe that all brands endorsed by Sachin have high potential. But for World Player, the presence of Sachin Tendulkar will add tremendous equity . I have a feeling that Sachin will do to World Player what Sunil Gavaskar has done to Dinesh Suitings. 

One of the factors that aid this brand is the pricing. One would expect this brand to be priced anywhere above Rs 1000, but surprisingly  Skumars has decided to price this brand between Rs 100- Rs 500. The brand is targeting youngsters aged 18-35 yrs. This brand is going to be a Mass Prestige brand.

By making pricing affordable, the brand has truly taken the price out of the equation in terms of marketing mix. Now branding and communication will decide the direction for the brand. Skumars should be commented because it didnot outprice the brand eventhough it had a celebrity like Sachin. Skumars has learned that lesson from its brand Tamariind which priced itself out of the market though endorsed by Hrithik Roshan.

By pricing the brand at Rs 100 - 500, the brand has not made itself cheap but affordable. The presence of Sachin Tendulkar will make the brand aspirational . I have seen a hoarding of the brand featuring Sachin and the brand had truly made itself aspirational. 

The brand uses the tagline " Be a World Player " which although a very plain basic tagline, will give creatives lot of space to work with. The tagline connects well with the brand ambassador also.

Skumars recently had lot of success with celebrity driven brand promotion. Be it Belmonte endorsed by SRK or Reid and Taylor endorsed by Big B, The company aims to break into the larger mass market with the cricket maestro Sachin. 

The presence of Sachin will create lot of expectations about the brand interms of the quality and design. The brand have to meet that high expectations which will be an Herculean task at a lower price-point.

The success of the brand will also depend on the brand's advertising strategy ( positioning) , the quality which it can deliver at the lower price points and the distribution. Skumars has a rich history and managing these will not be an issue. 

The only issue is the brand's future after the celebrity. But for now,  I am optimistic that the brand will truly create lot of ripples in the market.

Brand Update : Fiama Di Wills targets Men

Fiama Di Wills , the premium brand from ITC has now turned attention towards the growing men's grooming market. The brand has relaunched its range targeting the ever- beauty-conscious men by extending the Fiama Di Wills brand. 

Fiama Di Wills tried to enter the men's market in 2009 by launching a sub-brand Aqua Pulse. Fiama Di Wills Aqua Pulse shower gel was the product launched during that year.

This season saw a relaunch of the brand in shower gel and soap (bathing bar) form. Fiama Di Wills is currently running a TVC for the extension.

Watch the ad here : Fiama Men

This time around , the brand restricted the Aqua Pulse sub-brand to the shower gel variant and is using Fiama Di Wills brand to endorse the bathing bar while Aqua Pulse is mentioned in very small font.The main USP of the new variant is the sea minerals ingredient.

ITC has been putting heavy investment on the Vivel and Fiama brand portfolio. The brand has huge share of voice across the media. The equity of Fiama Di Wills will drive the initial sales of this variant.

I thought of Fiama Di Wills as a unisex brand and even though Deepika Padukone is the brand ambassador , the brand has been targeting both the genders. The launch of a specialized soap exclusively for men points to the effort of the brand to target this segment using a separate product. The launch also points to the recent trend in the Indian consumer family where individuals members like husband , wife, kids etc use separate  brands. 

One factor I noticed about Fiama Di Wills is the absence of a positioning platform for the parent brand. When the brand was launched, it had the positioning - Beautiful you , today , tomorrow. Later the tagline was lost among the numerous variants and campaigns. With the launch of multiple products targeting various segments, the brand needs to have a common positioning platform which connects all the variants together. Otherwise, the brand will have a confused state of existence in the consumer's mind. 

Related brand 

Fiama Di Wills