!"#$%&'()*#+,-,..(#/0"&(1-2%#-(3+#-2.(4502,$%-6(&7,(80-."9,+(3,7#:%0+(;(<+0*&7(=#&7(>0+(1-2%#-(3+#-2.?(

Functional Area: Marketing

PUNEET SHARMA SAMIT KHANNA SECOND YEAR, SECOND YEAR,

FMS DELHI FMS DELHI

puneet-sharma@fms.edu samit-khanna@fms.edu

+91 98719 59659 +91 9891 664 003

Executive Summary

"Local brands show what we are; global brands show what we want to be." – Consumer Insight

There is a general agreement that source of prowess of successful companies is the presence of big

brands in their portfolio. Every company wants to create & own the ageless brands & does spend a lot

of money towards this objective. Yet, many top executives are not very comfortable with following a

structured approach to branding.

Our research on the past successful and unsuccessful brands says otherwise. On a careful inspection

successful brands show a lot of common threads. These commonalities led us to model the consumer

behavior model that is the ultimate reason for the existence of any brand. Kevin Keller captures the

essence of branding when he says “A brand resides in the minds of consumers”. A brand should move

beyond its physical character to acquire a perceptual character hence representing itself as a means to

achieve what is sought by a customer.

In this paper, we start by discussing what a brand is from the perspectives of the organization as well

as the consumer. This gives us the foundation for building the models subsequently. Next we build a

model for consumer decision making process and bring in the perspective of the Indian brands vis-à-

vis multinational brands. We touch upon the importance of various parameters in building the Indian

brands and stress upon them with relevant examples. It’s not just the initial creation of a brand but the

reinforcements, evolution and revitalization that ultimately decides the winners in marketplace.

We have also conducted a primary survey to analyze the quality perception and understand the

consumer behavior and hence, help us arrive at the model. We conclude the paper by discussing a

framework which could help build the Indian brand both domestically and globally.

Introduction

“A Brand exists in perceptual space and is a perceptual entity”.

If Coca Cola’s facilities all over the world were to burn overnight, with all their physical assets going

up in smoke, the company would be able to start up the next day due to the value of its most important

asset — the Coca Cola brand, which in 2005, was estimated to be worth $67.5 billion. It’s hard to

imagine that an intangible can have such value, but the statistic shows that a brand is much more than

a mere name or a logo.

So what is a brand all about that all the companies spend so much on creating? In today’s scenario

brands are the basis of consumer relationship. A Brand to some may be a simple name, logo or

symbol whereas to others it may be a promise, guarantee, reputation or identification. But most

importantly, brands are conduits. They bring together consumers and marketers closer and bind them

together.

As Indian companies seek to be major players in global markets, one of the key challenges they face is

building global brands. Building brands is important — as wages rise with economic development,

competing on cost alone may not be sustainable. While brands may not necessarily translate into

premium prices, they help companies gain higher market share in a crowded market place as they

convey an assurance of quality and reliability.

In this paper, we have tried to understand why Indian consumers have the perception of global brands

as being better in quality and the factors that are determining factors for successful establishment of

any product as brand. Examples considered for this analysis are mainly from India.

Consumer Buying Behaviour: The Model

“The product can be copied, but a brand in its totality can not be”.

Strong brands have a distinct place for themselves in the minds of the consumers. Of course, all strong

brands are differentiated and command a lot of awareness in mind space of consumers; still the

attribute that actually results in increased sales hence generating billions of dollars is the powerful

appeal these brands generate.

Figure 1: Model for Marketer - Consumer Buying Behavior

Blitz Differentiation Create awareness

Generate Appeal

Study Consumer Behavior Perspective

High Involvement

Low Involvement

Experiential

Extensive information

Establish superiority

Appeal to Reason

Focus on one attribute

Concentrate on problem solution

Short & frequent visual messages

Appeal to toned down reason

Communicate feelings

High Visual Content

Appeal to Emotions

Global Brands Bastion

Global Brands Bastion Indian Brands Bastion

Marketers first have to create and then maintain a minimum level of awareness about the brand.

When Mahindra & Mahindra went for a blitzkrieg for Scorpio it was to create a minimum level of

awareness. The products that fail to maintain the awareness go into pavilion.

The prospects should be able to differentiate the product offering from the others in market. Ensuring

this differentiation has become a major objective of communication. As emphasized earlier, a brand

has to generate a powerful appeal to customers to be successful in market. Premier had a lot of

awareness and differentiation with respect to Maruti or Ambassador, but still it went out of market, as

it lacked the appeal.

For high involvement products, marketers should provide extensive information to the user and

establish their brand superiority over the rival brands. Hyundai ran a series of advertisements that

compared Santro’s features to those of competitors to establish its brand superiority.

Consumers in low involvement conditions tend to be problem solvers rather than satisfaction

maximisers. So focus on one or two attributes will fall with in their limited cognitive inclination.

Revive- ‘instant starch’, Disprin- ‘fast relief’ etc. are some instances. Brand communication should

attack the problem and establish brands as problem eliminators. Short and frequent messages increase

the top of mind recall, hence facilitating the brand at point of purchase. High visual content is

consistent with passive nature of consumer.

Some products like flowers, cards, etc. are bought for their affective delivery or satisfaction. In such

categories, the advertisements should arouse feelings in the consumer, hence generating an appeal to

his emotions. Omega’s ‘sign of excellence’ ignites same appeal to emotions.

Also point to note here is that, it is the Low Involvement products where Indian brands have been

doing exceedingly well and being accepted by the consumers. As we move up the value chain to the

high involvement and experiential products, there is a dearth of Indian brands and the global brands

are more prominent and have consumer acceptance.

Global Vs Indian Brands

“To remain domestically competitive, a brand has to be globally competitive”. Gone are the days when a company could be assured of its success in its strong hold bastion. Today

with the economy opening up, it becomes more accessible to multinationals with their proven track

record can displace any domestic brand. Hence, it is becoming increasingly important for the Indian

brands to establish their superiority in India and globally.

So, what is it that sets them apart from the Indian brands. The following factors are considered as

important and ratified by the primary survey (refer to annexure):

! Customer Focus: The Indian companies rank poorly on this aspect. Global players have a

perception of better focused strategy towards the consumers and work towards satisfying the

consumers rather than just selling the products.

! Symbolic Value: Owning and using a global brand has more symbolic value than that

presented by an Indian brand. Global brands have a certain amount of aspirational value

associated with them which makes them more desirable.

! Global Citizen: Consumers look to global brands as symbols of cultural ideals. They use

brands to create an imagined global identity that they share with like-minded people.

Transnational companies therefore compete not only to offer the highest value products but

also to deliver cultural myths with global appeal.

! Social responsibility: People recognize global companies wield extraordinary influence, both

positive and negative, on society’s well-being. They expect them to address social problems

linked to what they sell and how they conduct business.

! Perceived Quality: Consumers watch the fierce battles transnational companies wage over

quality and are impressed by the victors. People like global brands because they usually offer

more quality and better guarantees than other products. That perception often serves as a

rationale for global brands to charge premiums.

Perhaps the biggest differentiator and inhibitor for the domestic or local brands in context is the

perception of quality. Let’s discuss this in greater detail to come up with a solution to the problem.

PERCEIVED QUALITY

Perceived quality is defined as the customer’s perception of the overall quality or superiority of a

product or service with respect to its intended purpose, relative to alternatives. It is a perception

created overtime by the customers and hence cannot be objectively determined. Global brands score

higher than the Indian brands in perceived quality. So what creates a favorable perceived quality for

these brands:

! Global success

! Functional Expertise

! Financial Might

! Strength in research

! Flexible

The advantages rendered by a favorable perceived quality can be seen in the diagram below:

Perceived Quality

Reason to Buy Channel Member Interest

Differentiation/Positioning Price Premium

Perceived Quality

Reason to Buy Channel Member Interest

Differentiation/Positioning Price Premium

Strategies for Indian Brands: The Way Ahead

“Competitive Marketing is all about 3 W’s – War, Warrior and Wealth”.

The gradual integration of the Indian economy with the global economy marks the dawn of

competition which is favorable for the customers. We suggest the following strategies for Indian

Brands to fight it out with the Global brands:

1. Have a Vision for the Brand and Develop the Brand Essence

Build a Brand Arrow for your brand and understand what the value for your brand is. The brand arrow

is as shown below:

An understanding of the brand arrow enables a more focused strategy for the brand. This further

enables to an understanding towards the subsequent brand extension and creating a stretch map for the

brand.

2. Choosing the Right Brand Name

In cases where the country of origin is closely associated with the product being sold, a brand name

and a communication strategy that emphasize this origin are helpful. In other cases, the company and

brand may actually need to dissociate themselves from the country of origin. Sometimes good brand

names can add intrinsic value to the product being promoted and make the task of the other elements

easier. "Taaza" tea is a case in point -- it instantly communicates "freshness", a value consumers seek

from tea. "100 Pipers" conjures up naturally pictures of Scotland to a normal consumer and it adds to

the mystique and strength of the brand.

And a good name can give a brand a "head start" rather than just a "start", as has been the rule in the

past. "French Connection" in the UK is a great example. When the brand was re-launched in 1997, it

was just middle-of-the- road brand appealing to diverse audience with little fashion connotations.

The drama of the re-launch started with the name -- someone very cleverly recombined the initials of

the company to come up with an interesting name, FCUK. The name was a great starting point for a

brand with an attitude. Not surprisingly, it captured the imagination of a younger audience.

3. Creating Blue Oceans rather than fighting in Red Oceans

The Indian brands should focus on creating uncontested space rather than trying to enter the already

cluttered market. With its huge textile exports India can become the 'fashion apparel centre of the

world' within a decade. India's dark colored Old Monk rum should take on the mighty white colored

liquor, Bacardi, through 'gutsy, non-conventional, intrusive marketing' that highlights its history,

toughness, color and irreverence of a challenger, which are the qualities that connect with today's

young drinkers.

Indian mangoes can also fly India's flag high in international market; 'Ambo', the Alphonso mango

brand of an Indian farmers' cooperative, has the potential to quickly expand its export sales by a

conservatively estimated 1,000 per cent.

Figure 4: Model for Blue Ocean Strategy

Create a different category

Be opposite of leader

Scan Competition

Unique & Relevant

Create a Brand Personality

Create a Brand Identity

4. Pricing Strategy

Well established brands ensure that the price they charge is not too high or too low. In fact base price

should be based on the perception of the perceived value instead of delivered value.

The first step towards deciding pricing is to measure the perceived functional and symbolic benefits

of the product. Maruti Swift scales high on functional benefits and symbolically, it is fresh, youthful &

attractive.

User image plays an important role in determining the perceived value of a package. Mont Blanc may

not be the best pen around technologically but the user image attached with the brand increases the

premium that can be charged. Palio had strong functional and symbolic benefit package but the image

of parent company Fiat played major spoilsport in the brand’s downfall.

Once we measure the perceived value of the brand, brand manager can set his eyes on deciding the

pricing strategy. Psychological, Skimming or Penetration strategy can be decided upon.

The market factors like the pricing of rival brands in market and government regulations on margins

play their own part in determining the ultimate pricing strategy. Pepsi may score very high on every

parameter but it can’t charge more than Coke does.

Figure 5: Pricing Model & Strategy

Perceived Value

of the benefit package

Pricing Strategies

Company Image

User Image

Govt Regulations

Market Factors

Functional Value

Symbolic Value

5. Bonding with Customer

Marketer must first understand the nature of his brand and opportunities it has, to forge relationships

with customers.

In product oriented strategy, the delivered value should be greater than or equivalent to expected

value as was done by Chetak which established itself as a major brand just on the basis of its product

superiority. Brands like Pizza Hut follow more of a process oriented strategy when they try to create

a unique experience for the customer. Sunflame follows relationship oriented strategy when it takes

its dealers on a cruise ship trip.

The ultimate objective of building bonds with customers is to get the trust, willingness and

commitment of customers, hence making them loyal to the brand.

6. Brand Evolution and Revitalization

Brand extension has found favors with modern marketing world because of the advantages it has over

the other product launch options.

Brand extension is not as simple as attaching an established brand name to a new product. Ponds in

eighties tried with Ponds Toothpaste, only to disappear from the market. What determines the success

of extension is character of brand which continues to evolve over time.

Figure 6: Model for Bonding with Customers

Product Oriented

Relationship oriented

Process oriented

Experience = Perceived

value

Manager Customer

touch points

Get Retailers, Be Socially Responsible

Trust Willingness Commitment Affinity

Many brands start as product brands i.e. there is close approximation between brand and product.

MDH is a product brand for masalas. Sustained efforts and investments in the brand endow it with

intangibles that get accumulated Over the time product brand goes on to become the formula brand

i.e. it implies that a set procedure is used to create the product. The brand may begin to signify

expertise in a particular field. This expertise may lend itself to related products & brand may be

extended to products related with its field of expertise. Dettol has a long time association as effective

protection against germs. It has successfully used this association to launch soap, shaving cream,

plaster and talc in market.

At this stage, the brand can lend character, style, image & soul to the products that carry its name.

Cartier has strong associations with prestige, status and opulence. It successfully goes with a variety of

products like watches, jewellery, bags and pens which are not related with one another functionally.

Time

Brand Evolution

Product Brand

Formula Brand

Know How Brand

Intangible Brand

Evolution of Character of Brand with TIME

AMUL SYMBOL OF PERSONALITY AMUL

EXPERTISE IN MILK PROCESSING

Indianness Love Taste AMUL

MILK Fun Milk

AMUL MILK Type I Ghee Type II Butter

Condensed MilkType III

Products are manifestations of brand Brand identifies the product

Look for fit with brand character

Figure 7: Model for Evolution of Brand

Conclusion

“A brand is the most valuable asset that a company can own”.

Branding needs a shift of tactics and thinking on the part of marketing executives. With ever

increasing customer awareness levels, marketers can no longer afford to be complacent about their

brands & branding strategies.

Successful branding needs a structured approach with due attention to what seem to be very minor

details. It becomes difficult for Indian brands to create a niche for themselves because of the

abundance and proven credibility of the global brands.

Understanding the differences of perceptions of customers is the key to unlocking the market

potential. We have to understand the credibility, positive associations and additional valuation that

customer attaches with the successful brands. The perception of quality that is associated with the

global brands is difficult to unlock but it’s easier to create a blue ocean of opportunities for Indian

brands.

The way forward for the Indian brands is to go global themselves. Unless and until, Indian brands

become competitive globally they can not sustain their domestic dominance because sooner or later

they would be over taken by the global majors.

Finally the task doesn’t stop with the one time creation of a successful brand. We have to measure its

customer-connect, evolve it and consistently revitalize it to keep it relevant to the ever changing

consumers.

Annexure

We conducted a small primary survey to find out the perceptions of people regarding the global and

Indian brands. The questionnaire as well as the findings are attached below.

Details:

! Sample Size: 58

! Customer Contact Points: CP, Dwarka Main Market, Gurgaon Malls, Kamala Nagar Market

! Target Segment:

o Males Age group 25-50

o Females Age group 25-40

o SEC Classification: A1 + A2

! Methodology: In Depth Personal Interviews

Consumer Qualitative Questionnaire

1. Name: Phone:---------

2. Age:

3. Occupation: Student/Private service/Govt. service/Business/Self-employed

4. Family chief occupation (If student):

5. Position of responsibility:

6. Education: Literate/School (4 yr)/School (5-9 Yr)/SSC/HSC/Graduate/Post graduate/Post-

graduate professional

7. What are the qualities of good brand, as perceived by you? Kindly mention some of them in

the table below.

8. Rate the following needs on a scale of 1-10, where 1 Least, 10 Most wanted

1. Quality 2. Price 3. Service 4. Status 5. Indian or Global

9. Which of the following Deodorants would you prefer and rank them in a order – Axe, Adidas,

Rexona

(Refer the need list above for the respective numbers)

Rank 1 Rank 2 Rank 3 Deodorant

10. Which car would you prefer?

a. Tata Indigo

b. Chevrolet Optra

c. Honda City

d. Hyundai Accent

e. Maruti Baleno

f. Others

11. Which consumer durable brand would you prefer?

a. Onida

b. Samsung

c. Hier

d. Videocon

e. LG

f. Others

12. Name makes a difference in the choice of brands

a. Yes

b. No

c. Cannot Say

13. An Indian brand compared to global brand on the following parameters:

a. Price b. Quality

Most wanted

2 5 9 10 1

Least wanted Importance for you

c. Availability f. Aspirational Value

d. Status g. Trendy

e. Service h. Variety/ Assortment

As per the survey we could spot the following trends in the results:

Indian Vs Global Brands

05

101520253035404550

Price

Quality

Availa

bility

Status

Service

Aspira

tiona

l valu

e

Trendy

Variety

Indian Global

Perception of Brands

020406080

100120140160180200

Quality Price Service Status Indian or Global

Prefernce for Consumer Durables

OnidaSamsungHierVideoconLGOthers

Deodorant Preferance

AxeRexonaAdidas

Car Preferance

Tata Indigo Chevrolet Optra Honda City Hyundai Accent Maruti Baleno Others

References

1. Douglas B. Holt, John A. Quelch & Earl L. Taylor, “How Consumers Value Global Brands”,

2004

2. Philip Kotler , “Marketing Management”, Eleventh Edition, Prentice Hall, 2004

3. Harsh V. Verma , “Brand Management”, First Edition, Excel Books, 2002

4. Rishikesha T. Krishnan, Anshu Goel, Sachin Sharma, “Building International Brands from

India”.

5. Schiffman, Loen G, L L Kanuk, “Consumer Behaviour”, Prentice Hall, 1997

6. Keller, Kevin Lane, “Strategic Brand Management”, Prentice Hall, 1998

7. Jack Trout, Steve Rivkin, “The New Positioning” , McGraw-hill, Inc. , 2000

8. Blois, Keith, “The Oxford Text Book of Marketing”, Oxford, Oxford University Press, 2000

9. D C Court, M G Leiter, M A Loch, “Brand Leverage”, Mckinsey Quarterly, 1999, No.2, p 700

10. Harish Manwani, “Equity: The Brand’s Lifeline”, Brand Equity, 1995, pp 38-41

11. Aaker, David A, “Building Strong Brands”, The Free Press, 1996, p 67

12. D C Court, J E Forsyth, M A Loch, G C Kelly, “The New Rules of Branding”, McKinsey

Marketing Practice, 2005

13. H L Schmidt, “The Ten Commandments For Rebuilding A Brand”, WNIM, Sep 2005

14. A W Ulwick, "Turn Customer Input into Innovation", Harvard Business Review, 80,1, Jan 02

15. G Eckhardt, J Cayla, “Brand Strategies in Emerging Markets”, AGSM, Issue 3, 2003

16. Madhukar Sabnavis, “Why Indian brands prefer English names”, www.rediff.com, May 27, 05

17. Eva Martínez, “The Effect of Brand Extension Strategies upon Brand Image”, Dec 2002

18. Hildebrand, Klosek, “Brand Management Strategies:10 Key Points”, GoodWin Procter, Jun 03

19. Paul Temporal, “The Power of Brands’, Orient Pacific, 2005

20. Bill Nissim, “Brand Loyalty: The psychology of preference”, brandchannel.com, Jul 2005