Downturn best time for branding

Downturn best time for branding
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First Published: Mon, May 04 2009. 08 36 PM IST

Vikram Grover, Category head, beverages, HUL. Abhijit Bhatlekar / Mint
Vikram Grover, Category head, beverages, HUL. Abhijit Bhatlekar / Mint
Updated: Mon, May 04 2009. 08 36 PM IST
Tough times call for a hard look at branding strategies. Experts and companies believe a downturn is, in fact, the best time to create or revive a brand, going in for a makeover that involves some real change rather than spending money on routine advertising. The idea is to strengthen the brand so that it has a lead over competitors when the economy recovers.
Vikram Grover, Category head, beverages, HUL. Abhijit Bhatlekar / Mint
And some firms are attempting just this, through new campaigns, logos or a complete repositioning.
India’s largest consumer goods company by sales, Hindustan Unilever Ltd, or HUL, reworked the ingredients of its premium tea brand Lipton Yellow Label in March by focusing on theanine—an amino acid naturally present in tea. The exercise was aimed at repositioning the brand as a healthy beverage option. The repositioning was followed up by a new look, new logo and high- decibel marketing campaign.
“By doing this, we are certain we will be the choice of (the) new-age Indian and a significant success for the beverages category at HUL,” says Vikram Grover, category head, beverages, HUL.
Reckitt Benckiser (India) Ltd, the maker of the popular Dettol brand, recently sought to reintroduce itself through its initials “RB” written on a pink triangular kite placed alongside its full name. The new logo, created by the UK-based branding agency, The Workroom, is part of a global initiative to overhaul the corporate identity and help increase brand recall, according to the company.
Last week, direct-to-home, or DTH, television service provider Dish TV India Ltd, an arm of Zee Entertainment Enterprises Ltd, repositioned its brand with a new tag line Sabse Jyaada and revamped the channel packages it offers into three tiers—silver, gold and platinum—by grouping the channels genre-wise. “We felt the need to differentiate ourselves from other service providers. In a multiplayer scenario, it is imperative to create a differentiated brand strategy,” says Salil Kapoor, chief operating officer, Dish TV. The company will spend Rs5-6 crore of its Rs100 crore marketing budget this year on the new initiative.
These initiatives come at a time when companies, big and small, are witnessing a sizeable drop in profits. Across sectors, plummeting revenues have forced companies to tighten belts and make substantial cuts in ad expenditure.
According to an annual media report, This Year, Next Year: India Media Forecasts, by GroupM, the media buying arm of marketing communications conglomerate WPP Group Plc., total ad expenditure in 2008 grew by 14.7% to touch Rs22,683 crore, against nearly 20% growth in 2007. Growth in ad expenditure in all media is expected to slow to 4.7% this year, with print and TV ad revenues especially taking a hit.
Experts say this is the time to make fresh inroads; there is less clutter in the marketplace right now because of diminished business activity. Santosh Desai, chief executive officer, Future Brands, says: “Especially at times like this (during a downturn), companies take their brands more seriously. They take time to fix the most strategic question, such as what a brand is actually all about.”
In March, beverage maker Parle Agro Pvt. Ltd launched new packages of its flagship mango drink Frooti with emoticons and the tag line, Why grow up, to convey a more youthful image. The new look, supported by a new television and outdoor ad campaign, comes after a nine-month revamp exercise.
Raj Kurup, founder, CreativeLand Asia. Ritam Banerjee / Mint
“The campaign sets up a long-term strategy and vision for the brand. It is sharp, it is in keeping with the contemporary values of what a mango drink can embody. It is extremely youthful,” says Raj Kurup, founder and chief creative officer, CreativeLand Asia Pvt. Ltd, the agency behind the campaign. “We realized (that) being cool wasn’t alien to Frooti; it was just about reinstating the cool factor. Relevantly.”
“There is no better time than during a recession to create or revive a brand because this is when companies all around are cutting back, the prices are down for advertising and the noise is less, so this is the time to speak out,” says Nikhil Bahadur, a principal of US-based strategy consulting firm Booz and Co. Inc., who leads the company’s consumer, media and retail practice in India. “Also, many Indian companies are expanding and branching out to international markets, which sometimes call for an image makeover that will help them adapt to other markets.”
The consulting firm is looking at helping Indian clients revive old brands through its brand vitality assessment methodology. The tool helps evaluate underinvested brands that have strong equity and awareness, and create a space for these in today’s marketplace.
Says Neeraj R.S. Kanwar, vice-chairman and joint managing director, Apollo Tyres Ltd, “In fact, it is probably more important to focus on the brand during tough times to ensure that when the tide changes, the brand is capable of capitalizing on new conditions.”
After around 35 years, Apollo Tyres recently changed its logo. “The change was a felt need, given Apollo’s recent growth and expansion into new markets and products. In a sense, this change captures the evolution of Apollo Tyres from being a predominantly commercial vehicle tyre maker to a leader across diverse customer segments.”
The company has earmarked Rs7-8 crore for the gradual roll-out of its new identity over the next 12-18 months.
Similarly, home-grown consumer products company Dabur India Ltd seized the opportunity to relaunch its Vatika anti-dandruff range of shampoos in April with new variants, packaging and advertising campaigns.
“In the anti-dandruff shampoo category, Vatika’s market share stands at 8.7%. With this initiative, we are confident the Vatika Dandruff Control range would grow faster than the industry average and attain a 10% share immediately,” says V.S. Sitaram, chief operating officer, Dabur. “We hired Contract Advertising India Pvt. Ltd for the rebranding and the work on the same had started a year back,” adds Sitaram.
“Launching entirely new variants, products or initiatives is both high-investment and relatively high-risk. In such a situation ‘making the most of what you have’ is a good idea,” says Anand Halve, co-founder, Chlorophyll Brand and Communications Consultancy Pvt. Ltd . “The key, however, is that the makeover has to go a lot deeper than a mere change in the logo or the facade of a store. As an example, Godrej may change the colour of its logo, but the customer needs to see some real change in, say, the washing machines and air conditioners.”
The need to move up the value chain and cater to different consumer segments led edible oil maker Adani Wilmar Ltd to expand its brand portfolio in March and reposition its flagship Fortune brand as a premium edible oil brand rather than a value-for-money one.
VS Sitaram, chief operating officer, Dabur. Ashesh Shah / Mint
“We are pushing it up in the value chain to target urban and brand-conscious consumers on top of the pyramid,” says Pranav Adani, managing director, Adani Wilmar. The repositioning included a new tag line, The joy of eating, and a new jar design. While the repositioning has been carried out by Ogilvy and Mather India Pvt. Ltd, the new jar was designed by product design company Tata Elxsi Ltd.
“In the FMCG (fast moving consumer goods) category, premium doesn’t mean ‘more expensive’. Rather, it means better quality. We have created advertising for the brand which showcases the most basic benefit of good quality edible oil—‘the joy of eating’, which seems to have disappeared from our lives over a period of time. The idea is to reinforce the fact that the brand is a market leader,” says Prateek Srivastava, group president (South), Ogilvy and Mather.
Duncan Tea Ltd went in for a revamp of its flagship tea brand Double Diamond in the midst of the economic slump. And to make sure the effort doesn’t go unnoticed, the company “would be spending about Rs12 crore on the marketing,” says M.C. Appaiah, chief operating officer, Duncan.
Even biggies such as Bharti Enterprises Ltd and Reliance-Anil Dhirubhai Ambani Group, or R-Adag, spent a fair amount of money in 2008 on re-branding. While telecom, retail and insurance conglomerate Bharti Enterprises spent Rs15 crore on a new brand identity, R-Adag’s entertainment arm, Reliance Big Entertainment Pvt. Ltd, spent a substantial amount on rebranding its retail cinema exhibition venture, previously known as Adlabs Cinemas, as Big Cinemas. Essar Group, a Mumbai-based conglomerate with diversified businesses in telecommunications, shipping, steel, construction, power and oil, changed its corporate branding in October by replacing a 14-year-old logo and slogan and spent an estimated Rs30 crore on this.
“Changing the packaging alone could cost companies at least Rs4-5 crore but...for a bigger exercise it could be much more,” says Tejaswini Aparanji, associate vice-president, branding entertainment, P9 Integrated Pvt. Ltd. “Spending money on rebranding, a relaunch or new packaging is more of a strategic exercise; it is not a luxury. When companies have to target a new set of consumers or make their brands more contemporary, then they choose this route.”
Max New York Life Insurance Co. Ltd, or MYNL, which spent Rs25 crore on a repositioning exercise, Karo zyaada ka irada (plan for more) in 2008, claims that it helped the company form a stronger connect with consumers.
“The MNYL brand awareness scores moved up by 20%, one of the highest gains ever witnessed in the industry. Along with this, we see a clear business impact as well, demonstrated by MNYL’s growth rate of 34% (April 2008–February 2009), beating (the) average industry growth rate of all private players, which stands at 5% for the same period which is, of course, in addition to a host of factors,” says Anisha Motwani, executive vice-president, marketing, MYNL.
Emami Ltd, which is planning to launch pain reliever Zandu Balm with a new look after acquiring it from Zandu Pharmaceutical Works Ltd in 2008, says it will spend around Rs15-20 crore on marketing the all-new product. “We are redoing (the) packaging for Zandu brands and might also change the formulations where required,” says Harsh Agarwal, director, Emami.
“The rationale behind brands going in for a makeover during a slowdown is two-fold. One is that most brands during an economic slowdown actually sharpen their value proposition and that’s what they try to communicate to customers,” says Rajesh Kamat, chief executive officer, Colors, the Hindi general entertainment channel of Viacom 18 Media Pvt. Ltd. “Secondly, a slowdown might make employees go from business class to economy but the brand travels from economy to business—by that, I mean brands can get a much higher multiplier during recession...for the same money, a brand gets more bang for the buck.”
As the saying goes, a good recession (or downturn) never goes waste.
vijaya.r@livemint.com
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First Published: Mon, May 04 2009. 08 36 PM IST