In the mid eighties I used to be the account executive on the Ind-Suzuki brand as it used to be called those days and used to watch the work of our competitor Hero Honda with fascination and ill concealed admiration. Hero Honda launched a four stroke bike (to the disapproval of my erudite friends in TVS) clearly positioning the new product on fuel economy. The ad campaign which I can still recall had the tag line “Fill it, shut it, forget it”. To put it mildly the consumer forgot all the other brands (well almost) as the new campaign and the new brand took the market by storm and continues to rule the two wheeler roost two decades later. The Hero Honda Splendor has been an enduring brand success, built on a product which works brilliantly in Indian conditions and on the Indian psyche (fed and nurtured as it is on fuel economy) and is an excellent example of clear, single minded communication that has been consistent over the years. Hero Honda, the company did many things right and as a former executive of TVS Suzuki confessed privately to me “the best thing I did was invest in Hero Honda”. Competitors know the value of the company they are competing with right? Just as any team that played Australia in the early 2000s would tell you what it meant to beat them and the collective ambition of the entire cricketing world was to beat them and when they did it rarely it was a cause for wild celebrations. Let’s return reluctantly to our brand story. Suddenly (though it has been brewing for some time now) the two companies have split and Honda will soon launch two entry level bikes even as the Japanese giant is building a new factory in Andhra Pradesh and looks to beefing its distribution presence.
The latest to bite the dust
Two wheeler partnerships are not new in the country. TVS had a partnership with Suzuki, Bajaj had another with Kawasaki, Honda had a partnership with Kinetic and when the two split Kinetic lost its way and was bought over by Mahindra whilst Rajdoot too suffered after the Yamaha split. It is not rocket science to deduce that foreign partners need Indian companies to get acclimatized to the conditions here and more importantly the people and the customs. Indian companies too already have their distribution in place through the length and breadth of this country and any marketer will tell you that distribution is key to any brand’s marketing success. The learning from all of this is pretty clear. The partner who is better prepared for the split actually survives the split and in cases like Bajaj actually thrives. TVS is another case in point. Even during its partnership with Suzuki which was exhibiting signs of stress, TVS continued to design its own vehicles. The Victor which was a big success of the company was actually designed by TVS and this caused heartburn to the Japanese partner and if rumour is to be believed was the final straw on the camel’s back. TVS had actually planned its exit from the partnership fairly intelligently and has now emerged as a serious player in the two wheeler market particularly with its Scooty which has created a completely new category.
Will Hero continue to rule?
Hero is already gearing up for life without its Japanese partner and is in the process of creating a new identity with an international design firm of repute. While design has its value the new brand and entity, will have to understand its point of differentiation to the others, most of all to its former partner and current adversary. There is no doubt that Hero, thanks to its leadership in cycles knows India and has phenomenal reach, which is extremely critical though one must admit that there are other factors at play. One of the major reasons for success of a product in the two wheeler category will have to be its design and that to my mind is a major cause of worry. Does the Indian counterpart have the design capability to take on the world and its former partner and woo the now spoilt Indian consumer? I have my doubts and in the final analysis that will probably determine its success. Hero is a strong company with excellent financials, anchored in India and I feel that they too will pull through, but it is certainly going to be a testing, challenging few years and I as an admirer of the company will be waiting and watching to see how they make us forget the competition.
Ramanujam Sridhar, CEO, brand – comm.
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