the average consumer. This globalization has also led to enhanced awareness of possible “choices” from the consumer’s perspective and this in turn has resulted in the interesting paradox of emergence of a more “individual” customer who revels in being “different” from others. For example, Barista may have started with the initial premise of serving the best “coffee” in the country. The evolvement of its menu over the last 12 months tells the story about the Indian consumer who has rapidly moved on from just being a “coffee” drinker to one who now seeks a few dozen “options” before making her mind. The renewed interest in emergence of “specialty” stores - be it for clothing or footwear or electronics can be seen as a further indicator that the consumers are no longer satisfied with a narrow width or depth of merchandise in any specific product category (say in a department store) relative to what a specialty store can offer. And to further complicate, the consumer is seeking increased value each time she goes out to shop!

At the business level, the most challenging development is consolidation across all kinds of industries - be it travel, transportation, telecommunication, banking, consumer durables, or retail. The consolidation is not limited within the traditional geographical boundaries but is increasingly becoming cross-continent. As a result, local and national brands (and businesses) are being increasingly marginalised. In the Indian context, one only has to see the inroads made by the likes of LG’s, Samsungs, and Amways in the recent years. (Other sectors such as air travel, banking and retail may have also shown similar trends but for regulatory and policy restraints imposed on them).
Geo-political forces include developments such as emergence of WTO and increased domain and influence of regional trading blocks (EU, extension of preferential trade terms through legislation such as AGOA). The implications - by and large - imply a freer cross-border movement of goods and services (and brands).
Finally, technology is becoming the most potent enabler to facilitate increased momentum for these forces.
The most crucial challenge for businesses, therefore, is to create or retain differentiation of their respective product or service so as to prevent such goods from being commoditized thereby leading to destruction of value from the perspective of the stakeholders of such businesses. Traditionally, successful branding has served the purpose of creating and maintaining such differentiation to the benefit of the consumer, the retail channel, and the producer - owner of the Branded product or service. However, the forces of change as mentioned above make the task that much more formidable (to serve a national, regional or a global market, and yet ideally serve each market as if it has a “single” consumer).
Add to this the increasing media options, increasing flurry of new product launches, and an economy that is not galloping and the challenge is very clear that Brand building is increasingly tough and the costs keep rising substantially. Established brands like Coca-Cola spend as much as 20% of their revenue in marketing expense. Indian brands such as Raymond and Titan spend up to 5-6% of their annual revenues on marketing and brand building whereas Madura Garments has reportedly earmarked as much as 15% of their current annual revenue for this purpose.
How does, therefore, one manage such costs and still generate profitability?

Firstly, Brand Building effort in today’s context has to be seen in a more holistic manner. Delivering value on a sustained basis is perhaps the most potent key to build a brand that lasts. Wal-Mart, Home Depot, Dell, FedEx, LVMH - these are all organizations across a very diverse set of industries and across different customer segments who have built solid global brands without necessarily relying exclusively on

advertising and promotions only. Indian best practice examples include Jet Airways, Taj (Indian Hotels) and Oberoi hotels, and more recently MacDonald’s - each having built a distinct business identity on the strength of their product and service.
Unflinching orientation to customer needs in the second key success factor. As we have seen above, customers across the world are more informed and at the same time, have become more “individualistic”. Proactive tracking of shifts in consumer behaviour, anticipating needs, and then reacting in “real-time” are essential to attract and retain customer loyalty - a key element of creating brand equity.
Customizing the product (and communication of its benefit) to meet the specific needs of various consumer sub-segments is the third element in creating brand appreciation and generation of sales.
Thus, one can argue that Brand Building costs for any business in the present scenario are intrinsically linked to the very fundamental structure of the concerned enterprise itself. Too many companies mistakenly allocate a disproportionate amount of effort and financial resource on mere advertising and promotion (Home Trade is not the only current example. Others include the high profile launch of products such as Tamarind from S. Kumar’s where the media blitz did create consumer and channel excitement but the business unit failed to deliver the right product at the right place and right time). This is not to say that advertising and promotion is less relevant. On the contrary, with more choices and higher media clutter, businesses need to budget for an increasingly higher spend on their brand promotion budgets but this spending has to be undertaken in tandem with enterprise-wide “reengineering” of the business philosophy and core design, production, and delivery operations for the product itself.
The positive spin to this argument is that by first addressing the fundamentals as listed above, the enterprise itself becomes more competitive and this can be the beginning of a virtuous cycle wherein the brand equity continues to increase as the enterprise sustains delivery of an appropriate product or service at an ever increasing value.
It is, however, crucial to note that in the years to come, not only will the cost of building a regional or a national (or an international) brand will continue to rise but also the time taken to do so will be longer and will need sustained and focussed efforts. The top 10 global brands (as per Interbrand) continue to be “old” icons led by Coca Cola, Microsoft, IBM, GE, NOKIA, Intel, Disney, Ford, McDonald’s and AT&T. In most commonly used consumer product and service categories, the leaders continue to be those who have held the pole position for several decades. Displacing them is a tough call, and this in itself is perhaps the strongest argument in favour of recommending that businesses must invest (and continue to invest) in building powerful brands since only then can they have a chance to acquire and retain the customer of the 21st century. The payback period is going to be longer, but the payout period will also be longer!.