Creating and Brand
Arvind Singhal Chairman, KSA Technopak India
The most important change in India has been the demographic one. By this time, almost all know that we are a nation with a very young populationBrand owners or creators have to invest more time, effort and money in trying to forecast impending changes in consumer behavior and expectation

These young consumers are also far better informed than their parents, by and large, by virtue of their being better educated, having better access to a wider array of information channels e.g. TV, Print Media, Internet, and generally being better connected with their peers not only nationally but internationally.

Over the next 10 years, almost all major categories of consumer goods and services will have a majority of potential customers who are fundamentally very different to the kind of consumer marketers have known in the past.

In this environment, how does one create and preserve value through Branding and Brands? The answer, not so surprisingly, is rather simple. As a young MBA student in the USA during 1980-82, the first principles about marketing that I was taught at that time are still relevant. Businesses have to start by investing in spotting (hopefully, earlier than their competitors) currently unmet or unsatisfactorily met, or emerging consumer needs and then developing products that can satisfy such needs in the most efficient way. Once such products have been developed, they have to be distributed through the most appropriate channel so as to reach the targeted consumer. To encourage the consumer to try the newly introduced product, awareness has to be created through innovative advertising and the first purchase has to be induced through an attractive promotion effort.

Surprisingly, in the recent years, many otherwise very successful businesses have intentionally or otherwise lost track of these basics. Products are being created or pushed that do not necessarily serve an immediate mass need (like Ready to Eat Roti’s or carbonated cola beverages or flavored yogurts and processed cheese) or are “obsolete” as one would think what Ford, GM and Sony tried to do (at least initially) or come with the wrong price-value proposition (like perhaps Whirlpool or Levi Strauss). Marketing innovation is being reduced to a single dimensional effort of getting very high cost (and usually very less effective) “Brand Ambassadors” and very high cost advertising (including ridiculous spends on production if one were to see the effort from Coke, Pepsi and Bharti in recent years). In a contrast, successes such as LG, Samsung, Hyundai and others have not only invested in a reasonable quantum of product innovation, but other P’s such as pricing, promotion and the retail channel (and service, where needed).

Over the next five years, some fundamental changes will happen in India on the distribution side as well. With as many as 500-600 new shopping malls coming up in 50-60 cities in India, tectonic shifts will happen both related to where we shop and how we shop. Large, multi-location, regional or national retailers - both Indian and International - will increase their share of consumer spending and in the process, create a shift of power from producers and brand owners to their own business that offers shelf space so vital to reach to the end consumer. In fact, Retailers are likely to become big brands in their own rights (such as already being seen in India when we consider Shoppers Stop, Food World, Lifestyle, Westside, Vivek, Big Bazaar etc.) and thereby reducing the leverage “product” brands currently have in the market place.

In this environment, brand preservation becomes more challenging but nevertheless, it is still a manageable challenge. Brand owners or creators have to invest more time, effort and money in trying to forecast impending changes in consumer behavior and expectation (and make this an ongoing process rather than a one time activity). Businesses also have to invest more time, effort and money in understanding where the Indian consumers are likely to be shopping in the coming years, and what kind of retail formats (both physical and virtual) are likely to find favor from these new consumers. They then have to rejig their current product portfolio to meet these new (emerging or latent) consumer needs and desires, and rework their distribution strategy accordingly. The role of advertising has to be very carefully examined in light of the fact that in the years to come, majority of targeted consumers in India would actually be first time users of many of the so called Fast Moving well as Other consumer goods and hence the role of promotions that are more based on inducing trials will be far more critical. All things being equal, consumers world over are becoming more value conscious. In case of India, the situation is even more complicated since many potential consumers’ already have high quality/performance expectations on account of their being better informed but at the same time, their disposable incomes are still highly limited (and chased by an ever increasing array of spending categories). Hence, the brand promise has to unequivocally assure “value” almost irrespective of the inherent quality, performance, fashion or innovation attributes.

To conclude, we will continue to see many more icons of the yesteryears fall by the wayside in the near future. They would be overtaken/replaced by a plethora of new generation businesses - both of Indian as well as international origin. Successful branding will remain one of the most potent tools for businesses to create and preserve value, and the fundamentals behind creating successful brands shall remain the same. What we do need is going back to the basics.

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