A brand Exploration – April 2015

Leading by Design

GROWTH BY DESIGN

“If it's the right chair, it doesn't take

too long to get comfortable in it.”

Robert De Niro

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The genesis

An active, full-fledged factory manufacturing office chairs. A father who vacated the entrepreneur’s chair, moving on to the US; the current MD’s taking on the reins by default, and settling in as time moved on.

A clear case of life making its own plans!

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Providential support and measured steps

A series of fortunate turns and milestones took Transteel up the path of evolution.

• A series of milestones: the Infosys order, the first big

order from Kochi

• Consistent financial stability; no major liabilities

• Positive personal milestones

• Deeper interest in Transteel; renewed value addition

• European designs emulated; price competition with

Featherlite

• An excellent production manager; sets to work on a ‘war footing’

• Pilferage reduced, production streamlined

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Abiding practices, intrinsic values

Some key aspects in Transteel’s DNA helped cement growth in the early years:

• A strong, direct connection with clients

• 15% - 20% price advantage over direct competition

• Exhibitions at Safina Plaza – advertised and well attended…

And the company moved on smoother castors with stability and strength:

• New, bigger customers, bigger names which helped growth

• Transteel becomes visible, heard, recognised and stable

• Emerging realities: Malaysian and Chinese brands, smaller players

• Competition rises in all levels: Indian, International and Asian

• Finds a comfortable ‘bubble’ to operate in

Transteel today

Recognized and stable, yet without a clear brand image.

• Familiar name, accepted value

• Long-term, luminary customers

• Stable in every sense: financial, sourcing, production, client

• Sourcing process meets demands of cost, design, market needs, volume and production

• Familiarity with architects and other influencers

• Human capital and leadership in place for all needs (except design)

• Renewed hunger and dynamism

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Why a renewed brand exploration?

After integrating Transteel’s business line with Liquid Metal workstations, a new brand personality was found necessary:

• To imply entire office furniture solutions

• To capitalize on the brand’s strengths for a sustainable brand promise

• To be competitive in the chosen segment

• To move on from being a familiar name to a distinct brand

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Brand exploration: the objectives

Key objectives of Musecomm’s brand repositioningfor Transteel include relevance, differentiation andcredibility. Successful brands and businesses must:

• Be relevant to consumers

• Be unique versus the competition

• Be credible and attainable

• Relevance is priority #1. Customers must find the brand appealing. If not, the brand won’t make it into the consideration set

• Differentiation is critical and the key driver of positioning success

• Being credible and attainable is the final measure.

Credibility provided in the offering means a bankable offer to the customer

CompetitiveDifferentiation:

CustomerRelevancy

Product A

Product C

Product B

Motivationalpower = Profit

Margin

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The brand exploration process

Musecomm’s brand re-examination follows a 3600 format that involves multiple stakeholders: the management, employees, customers, prospects, decision makers, influencers, competitors and channels. On the brand owner’s side, we capture inputs from all levels from founder through manufacturing to sales and service.

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Snapshot: the making of Transteel

Product (chairs & workstations)• Simple, effective design, dictated by market needs and trends

• Reasonable quality & service

• Largely comparable to Indian competition

• Not much customization provided

• Primarily aimed at the IT market

Manufacturing + delivery process• Sourcing: identifying, importing/purchase from Indian vendors

• Fabricating components for sub-assembly and/or integrating imports

• Finishing, informal quality checks, packing, despatch

• Installation on outstation deliveries

Packaging• Plastic cover for both cushion and the back rest

Vendor profiles• Indian: dependable local component vendors, but finishes poor compared to imports

• Chinese: varying levels of dependability, quality, innovation and design; sometimes a ‘hit or miss’ situation

• Strong vendor relationships

• Financial and delivery advantage

Quality• Quality of outsourced parts always ensured

• Does suffer from occasional quality surprises

Pricing• Starting with Rs. 3,200 to Rs. 3,500+taxes

• Prices in all the ranges till Rs. 18,000+taxes

• Limited numbers of imported (CKD) chairs also available

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Market analysis: who buys, where, and how?

A closer look at the dynamics of choosing, buying and paying.

(a) Market Segments• Unorganized local sellers

• Organized local sellers

• Local branded sellers

• National branded sellers

• International branded sellers: European & American• International branded sellers: Malaysian

(b) Key features of each segment• Unorganized sellers have a cost advantage

• Organized local sellers have a cost and knowledge of customer advantage

• Local branded sellers have an advantage of brand recall and trust

• National branded sellers have an economies of scale, manufacturing and design advantage

• International branded sellers (Euro & US) have worldwide brand acceptance

• International branded sellers (Malaysian) have the cost, design, taxation and manufacturing advantage

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(c) Corresponding buyer groups• Unorganized sellers: retail purchasers – where cost and immediate delivery play the prominent role

• Organized local sellers: SMEs with 20 – 50 head count: where cost still plays a prominent role, and quality is important

• Local branded sellers: retail purchaser, SMEs 50+ and MNCs where cost is vital; but quality, design, brand name and service are equally important

• National Branded Seller: SMEs 50+, MNC and government, where cost is a factor for the lower end of users but not so much for the higher-end users

• International Branded Seller: usually for CXO-level and foreign visitors; ultra-premium category where price is not an issue, but design and brand are vital

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The target audience and their perceptions about Transteel

Buyers and prospective buyers• Corporate/MNC

• Medium size Indian companies

• Specialized segments

• SME segment

• Walk-ins/ retail

Influencers• Architects: opinion leaders, design influencers, especially vital for aesthetics and utility-related decisions

• Interior Designers: same as above

• Facility Managers: vital for the selections of the office solutions; concerned mostly with price, service and installation

• Project Managers

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What they think about Transteel today

(a) Design• Competitive and interesting

• Meets expectations, largely

• No signature designs

(b) Product • Comfortable, supportive

• Utilitarian

• Long lasting

• Easily available

• Economical

(c) Service• Adequate

• Experiences range from acceptable to excellent

• An effort is always made towards fulfilling service expectations

(e) Overall value• High on reliability and economy

• Medium on service and ownership experience

• Low to medium on aesthetics

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SWOT Analysis

An exploration of the strengths, weaknesses, opportunities and threats before the brand

Strengths• Production

• Accepted product

• Familiarity and reputation

• Competitiveness

• Responsiveness/service

• Availability in all price ranges

• History

Weaknesses• Design

• Personnel

• No clear brand image

• Certain customers’ preference for international brands

• Dependence on unpredictable Chinese vendors

• Presence largely limited to Bangalore

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Opportunities• Concentrating on Transteel’s chosen ‘bubble’: the value-based branded segment

• Targeting the local market, especially the SME segment

• Expanding brand perception with the advent of Liquid Metal

• Utilizing Transteel’s strong Chinese connection for design and innovation

• Riding on the image of global alliances (Artwright etc.) for denting the higher market segments

Threats

• Economies of the scale helping bigger players

• International companies opening branches in India

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Founder’s vision

The dream at the helm – what the Managing Director is aiming for:

“To grow and stabilize within the market niche where we operate; to be a favoured brand in design, utility and value amongst discerning corporations, for office furniture solutions.”

“Not necessarily to scale up and touch superlative levels of sales and geographic volumes.”

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The routes open before Transteel

Looking at the brand’s inherent strengths, evolution and growth potential, there are 2 logical openings, in the following sequence:

• To stabilize with a stronger, clearer positioning within the chosen ‘bubble’- with design superiority, distinctive looks and contemporary technology

• To reach for the next level in volumes, geographies and ` image without affecting the financial self-sufficiency of the company

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Branding direction

• ‘Growth by Design’

Illustration:

‘We combine our product, value proposition, customer promise, experience, relationships, design idioms, and future path to support your growth

and evolution. We keep investing in us to be the strongest partners for you.’

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• ‘Growth by Design’

In other words,

‘Office furniture solutions to travel upwards with. Dependable, built to your priorities, high on value and economy, smart.’

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Some pointers from Musecomm

I. Invest in design and communications to create a stronger appeal for Transteel in its chosen niche

II. Create a showcase of superlative design• Focus on design, aesthetics and technology

• Bring in signature designs from global sources

• Bring global brands as well as well-designed products rebranded as Transteel

• Re-focus communications towards design excellence

III. Upgrade the workstation line to be on par with the chair line• The disparity between the two lines should be reduced

• Workstations’ image, design, quality and range to be upgraded

• Communications to promote both the lines equally and strategically

Design

Technology

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IV. Reach out to the prospect with deeper, design-led engagements

• Create a well-designed experience lounge at Transteel premises

• Hold theme-based design contests for young architects and designers

• Evolve Transcribe into an ongoing new product communication sort of an advertorial magazine

• Redesign website and other online media for a contemporary appeal and interactivity; launch an online campaign

V. Upgrade marketing and sales messaging • Inculcate a consistent, superior messaging content and style through training and coaching

• Introduce interesting, design-led sales aids

• Focus on design and technology

"There is a fifth dimension, beyond that which is

known to man. It is a dimension as vast as

space and as timeless as infinity."

Rod Serling

GROWTH BY DESIGN