Best Brands

8/8/2019 Best Brands

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"Kellogg's set up a branch in India and started producing Corn Flakes to give consumers the real thing. What they didn't realize was that Indians, rather like the Chinese, think that to start the day with something cold -- like cold milk onyour cereal -- is a shock to the system," says Bhabha. "And if you pour warm milk on Kellogg's Corn Flakes, they instantly turn into wet paper. In business studies, when you look at a market, you have to know something about its anthropology and its cultural rituals."

Given how many marketers worship at the altar of brand integrity, the attempt toprotect a product by changing it as little as possible around the world is understandable. And for some geographic expansions, it may be exactly the right thing to do. In India and many other countries, however, transplanting a business from one cultural, economic, and political setting to another requires more.

ON THE RIGHT TRACK. In the last century, many railroad companies nearly drove themselves out of business by believing they were in the locomotive industry rather than the transportation business. Today, many big global companies cling so tightly to their brands as they globalize that they forget what the brands actually stand for in the first place.

Had Kellogg's aimed at winning in the "breakfast" market rather than importing intact the cold cereal category with which it was familiar, the company's full talents could have been focused on creating products that suited the Indian preference for a hot breakfast.

In 1960, Harvard Business School professor Theodore Levitt chastised the train industry for not taking off into air travel, and he proposed a fundamentally user-centered approach to corporate positioning in the face of technological change.Too many companies, he argued, overvalue their current investments and undervalue opportunities for growth that are deemed outside the core business -- but which address more effectively their customers' basic needs.

The problem of taking established brands to success in high-growth markets is quite similar, and it is time to dust off Levitt's framework, turn it ninety degrees, and return it to service. Whether responding to differences technological orcultural, the basic lesson remains the same.

In the long run, core competencies can change, but a fundamental focus on the consumer is always essential. It is better -- and easier -- to develop new skillsthan to lose your customers.

FREE YOUR BRAND. The best brands are not superficial logos or slogans but organisms that robustly and regularly satisfy some fundamental human need. They are bigger than the sum of their supply chains and storefronts. Their competitive adva

ntage is in knowing, understanding, empathizing, anticipating, and serving theircustomers better than the competition -- not just making more copies of the same.

When considered in this way, Coke ((KO)) is not a sweet, brown cola but cool refreshment. McDonald's is fast, clean, and easy for families to enjoy together. Citibank ((CITI)) doesn't just store money but offers trust. Vodafone doesn't sellGSM technology but connections to friends, family, and business associates.

Pizza Hut's success has increased in direct proportion to its adaptation of itspizzas to the local palate. According to Alok Lall, general manager of Saatchi &Saatchi in New Delhi, who managed the account previously at JWT, the company struggled in this market, primarily because the [standard Italian] toppings were c

ompletely alien to Indian taste buds.

"But with the launch of a Tandoori Pizza," says Lall, "the results were amazing



-- store traffic quadrupled. It was a flavor Indians were already comfortable with, and Pizza Hut has since launched many more flavors tuned to Indian tastes. Today, Pizza Hut has more than 150 restaurants in India, and the cash registers are ringing overtime."

AIR CONDITIONING. Pizza is from Italy, where tagliatelle, not tandoori, is thenative tradition, and Pizza Hut is a thoroughly American creation. Yet both the

dish and the brand were able to thrive in a new setting because Pizza Hut's leaders understood that their offering of fast, hot food in a clean, casual settingcould transcend a recipe book.

Sandeep Kohli, managing director for the Indian subcontinent at Yum Brands ((YUM)), Pizza Hut's parent company, puts it best: "We follow a simple philosophy: Pizza Hut is an international brand, but it has an Indian heart."

Yet while Indians have come to enjoy Pizza Hut's offerings, there are some partsof the global brand that they do not want to change, such as air conditioning,the quality of ingredients, and customer service. "There is a fine line betweenmaking sure the brand doesn't lose its international heritage," says Kohli, and

ensuring that it suits local tastes. "We make no compromises on the global norm,but make it familiar."

The best brands are confident enough to adapt without compromising their core strengths. When faced with a new technology or market, they can translate the value proposition in meaningful ways that are consistent with both their heritage and their potential.

BIG CURRY MAC. McDonald's dispensed with its most prominent ingredient in orderto respect, and to please, its Indian customers. Many Indians eat no beef or pork, or any meat at all. According to Vikram Bakshi, managing director of McDonald's India North, it was necessary to adapt the company's offerings while keepingthe core brand values consistent across cultures.

"The menu has evolved over the years as a result of constant innovation and ourcustomers' needs," says Bakshi. "Local creations like McAloo Tikki Burger, CurryPans, Wraps Pizza McPuff, and McVeggie are established departures from what wehad in our introductory restaurant offerings.

"Today 70 percent of our menu is Indianized', and the McAloo Tikki burger is ourhighest selling product. While the menu may be different in some ways, the McDonald's experience around the world is consistent, offering quality, great service, cleanliness, and value."

Since drive-through service is not common in India, scooters and bicycle delivery services extend the concept of a quick, hot meal on the go in a way that is quintessentially Indian yet consistent with the global brand. It's still McDonalds, and Indians love it. Think global. Be local.



iPhone came to India with a bang. That bang lasted only for the night of the launch. Since its launch it has been weighed, tested and found wanting.

Here are the 7 reason why iPhone did not work in India.

Cost is too high for a phone which offers no new features except the touch scree

n. Priced at Rs31, 000 for 8GB and Rs36,100 for 16GB most of the phone buyers felt its not worth it.There is no 3G network yet in India. Though the 3G auction process is complete and the spectrum is allocated it takes a while for the service providers like Airtel and Vodafone to roll 3G enabled services out. It could be in early 2009, which is a good 6 months away. So why pay for a service which cannot be used?People are waiting for Nokia N96. Seriously, most of my colleagues have said that Nokia N96 is a better phone and they will wait for it rather than going for iPhone. Sure the iPhones touch screen is good and its iPod music playing capabilityis awesome but I would rather not spend my money for just that. I want more. Besides, the brand value of Nokia in India is pretty strong and Apple has to workreally hard to break that. iPhone did not give a compelling reason (other than t

he touch screen) for people to leave their N series phones.Hygiene factors are missing. Many features which are a given in a phone that costs you Rs4, 000 are missing in iPhone. I am not sure why they were but, video recording, cut paste, sms forwarding (how can you miss this) options are lacking.Consumers are waiting for the price to drop. This has been the case for a whilenow. I bought a 4GB iPod Nano for Rs.18, 000 in March 2006. I have checked backed into apple store after 6 months and for the same price they were selling 30GBiPod video. It is an apples and apples comparison and they did not match. So, Ithink apple will cut its prices and people are waiting for that.Alternative routes to acquire the phone at a cheaper price. iPhone crazed are the people who mostly work with technology. They usually know what the going rateof iPhone overseas is. So, it is not hard to get an iPhone 2G for $200 and unlock it for Rs. 1000 here in India. I am not sure if this route will work for 3G. S

ince there is no difference between 3G and 2G right now in India this would be asteal. Even the rising dollar would not be a factor here.Apples monopoly did not go well with Indians. Apple has ingenuously designed products and equally ingenuous monopoly. Indian consumers do not want contracts. They would like to change phones, change numbers whenever they want. They do not want to be married to a number and a phone. Besides, when you buy a phone at suchan exorbitant price, how can you justify the fact that you cannot change your phone for a different number or a different vendor? I am finding it hard to justify. Only Steve Jobs can answer that but until then Nokia might rule the roost.iPhone in India has a long way to go. Unless the prices are slashed and apple ties up with other GSM service providers it might never take off. We just have towait and see if rolling of 3G services might give it a second life. A price of Rs. 20,000 would find more takers at least for the 8GB version.

Warren Buffet once said that when a manager with a great turnaround reputation e

ncounters a company with a reputation for dysfunction, it is the company that will keep its reputation.



So it was with some sadness that I saw Motorola bow to investor Carl Icahn's demands that the company be split. Motorola Chairman Ed Zander dropped by the otherday and the best thing I can say was he was still a bit shellshocked. Here is the company that invented the cell phone in the fastest growing market in all oftechnology getting clobbered.

So, sports fans, pick the reason that Motorola failed. Multiple answers are allowed.

1. Motorola missed the movement to 3G. Sure, it did but remember its biggest customers, the U.S. wireless carriers, didn't think they wanted 3G. So Motorola listened to its customers, when they should have been listening to its customers' customers.

2. Motorola was a stodgy Midwest company in a fast paced Silicon Valley world. There is probably some truth in this. The Razr was an aberration a wild success.

It is hard to have a fashion business inside an industrial firm. Today Nokia ismoving into graphics-rich cell phone games while innovation from Motorol is giving you RAZR-lite retreads in puke colors. Apple understands design; Motorola doesn't. Motorola's fashion sense only rivals New England Patriots' coach Bill Belichick's.

3. Motorola got out of the right business at the wrong time. Motorola at one time owned lots of spectrum, which it traded for equity in Nextel. So it starts every year with zero sales while firms such as Qualcomm own intellectual property worth billions, and Verizon, AT&T and Sprint have millions of customers who willpay them $500/year. Motorola turned down a chance years ago to buy both Qualcommand/or Nokia (for $20 million!).

4. Motorola just ran out of time. That's what every losing coach in history says. Doesn't fly. Maybe it had the wrong management but running out of time was notthe problem. It did have a computer guy ( Zander) who had to learn the industry, but that could have been bridged. After all, what did Steve Jobs know about phones?

5. Motorola should have moved into content. This one might be true. Motorola ledin set top boxes and IPTV. It should have jumped all over Tivo/Slingshot. It made a great acquisition with Symbol and it understood content, but didn't carry the day.

6. Motorola stopped innovating. True. Do you carry a BlackBerry? A smartphone? Should Motorola have been a platform company, like Google is moving to? The Razrwas the precursor to both the iPhone and the BlackBerry. By being late, it surrendered the high ground. It should have jumped on Palm. Plus, no one on the Motorola's senior management team ever sold a product to a consumer. It really doesn't sell licenses; it sells phones to teenage girls on Facebook.

7. Motorola didn't execute. Exactly so. Its customers the wireless carriers hada hate-hate relationship with Motorola, which did not deliver what it promised it would. Motorola never drank its own Kool-Aid; they never built the "seamless mobility" lifestyle among its various product groups. Can you see a way that consumers could have wanted to tie in their needs at home, at work, on their personand their auto? Sure you can. But Motorola could never bring these warring tribes together inside the firm. Face it it communicated mainly by rumor

8. Motorola didn't grow. In the past, unhappy stockholders would just sell theirstock. Today, they moan and scream and force stupid actions. Motorola now has t



o go through gyrations which will make it easier for its competitors. Right now,no one wants to buy this division so it will be spun off to the stockholders. This looks like a very tough business to run. Turning a company with a downward spiral is the single hardest job in technology.

9. Motorola is a loose confederation of warring tribes. Of course it is. It is acompany of 66,000 employees. But the warring tribes never coalesced. This was t

he problem that Zander tried to fix. Too little, too late. Game over.

10. Motorola never had the sense of urgency. Could be true. Everyone else movesat warp speed; Motorola jogged at its own pace, more like a monopolist than a paranoid competitor.

One of the benefits of capitalism is that it kills off those that are slow to innovate, slow to execute. But I feel somehow badly that the firm that invented cellular is now the walking wounded.

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Best Brands