Vijay Mallya case: Interesting to see who bids for Kingfisher brand, says consultant

Vijay Mallya row: It will be interesting to see who bids for the Kingfisher trademark and its logo now put on auction by the lenders to Kingfisher Airlines, a brand consultant said on Wednesday.

“The Kingfisher Airlines brand is an extension of the brand equity of the popular beer brand. The branding was around having good times. I am not sure who will be interested in the brand at this juncture,” Ramanujam Sridhar, founder and chief executive officer, Brand Comm, a brand consulting company, told IANS over phone from Bangalore.

According to him, if the potential bidder is an airline operator, the question is why would he, since he could actually extend his existing brand.

On March 29, SBICAP Trustee Company Ltd. put on the block nine brands/trademarks of Kingfisher Airlines following huge loan default.

According to SBICAP Trustee, the total loan dues of Kingfisher Airlines as of January 31, 2014, were around Rs.6,963 crore.

The banks lent to the Kingfisher Airlines against Kingfisher brand and trademarks as collaterals.
The borrowing was guaranteed by United Breweries (Holdings) Ltd. and Vijay Mallya, the airline’s promoter.

The consortium of lenders took possession of the trademarks on March 8, 2016.
While Kingfisher Airlines owes more than Rs.6,963 crore borrowed against its brand value, the reserve price for the auction of the brands/trademarks is fixed at Rs.366.70 crore.
According to Sridhar, reviving a dead brand has several challenges as it might come with a negative baggage.

“Kingfisher Airlines is not in existence for sometime. For a traveller, punctuality of flights is more important, which in turn would promote customer loyalty,” Sridhar said.

Speaking about Kingfisher Airlines brand, he said a lot of negativity is associated with the it for the past several months.
The e-auction is fixed between 11.30 a.m. and 12.30 p.m. on April 30.

Interesting to see who bids for Kingfisher brand: Consultant

IANS | Mar 30, 2016, 07.15 PM IST

Chennai, March 30 (IANS) 

 

It will be interesting to see who bids for the Kingfisher trademark and its logo now put on auction by the lenders to Kingfisher Airlines, a brand consultant said on Wednesday.

"The Kingfisher Airlines brand is an extension of the brand equity of the popular beer brand. The branding was around having good times. I am not sure who will be interested in the brand at this juncture," Ramanujam Sridhar, founder and chief executive officer, Brand Comm, a brand consulting company, told IANS over phone from Bangalore.

According to him, if the potential bidder is an airline operator, the question is why would he, since he could actually extend his existing brand.

On March 29, SBICAP Trustee Company Ltd. put on the block nine brands/trademarks of Kingfisher Airlines following huge loan default.

According to SBICAP Trustee, the total loan dues of Kingfisher Airlines as of January 31, 2014, were around Rs.6,963 crore.

The banks lent to the Kingfisher Airlines against Kingfisher brand and trademarks as collaterals.

The borrowing was guaranteed by United Breweries (Holdings) Ltd. and Vijay Mallya, the airline's promoter.

The consortium of lenders took possession of the trademarks on March 8, 2016.

While Kingfisher Airlines owes more than Rs.6,963 crore borrowed against its brand value, the reserve price for the auction of the brands/trademarks is fixed at Rs.366.70 crore.

According to Sridhar, reviving a dead brand has several challenges as it might come with a negative baggage.

"Kingfisher Airlines is not in existence for sometime. For a traveller, punctuality of flights is more important, which in turn would promote customer loyalty," Sridhar said.

Speaking about Kingfisher Airlines brand, he said a lot of negativity is associated with the it for the past several months.

The e-auction is fixed between 11.30 a.m. and 12.30 p.m. on April 30.

Sharapova after-effect: Why brands choose to leave or sometimes stay back

Sharapova after-effect: Why brands choose to leave or sometimes stay back

Collin Furtado | Tue, 8 Mar 2016-10:56am , Mumbai , dna webdesk

 

It is not uncommon for brands to cut their ties with sports celebrities. There are many such scandals that have erupted in the past

Russian tennis star Maria Sharapova on Monday confessed to failing a drug test at the Australian Open due to a substance she was taking for health issues. Within hours, sportswear giant Nike suspended its sponsorship with her, saying in a statement that it was “saddened and surprised by the news”.
It did not take time for other brands to sever their ties with the sports star. Swiss watch brand TAG Heuer too announced that it will not renew its sponsorship deal with Sharapova. TAG Heuer said in a statement that its previous contract with Sharapova had expired at the end of 2015 and it has pulled out of negotiations on a new agreement.

This was followed by luxury carmaker Porsche, a division of Volkswagen AG -- who's already under fire for the cheat software that gave false emission reading when under test conditions -- suspending Sharapova as its brand ambassador. "We regret the current news about Maria Sharapova. Until further details emerge and we are able to analyse the situation, we have decided to suspend planned activities," Porsche said in a statement.

ALSO READ

After Nike and TAG Heuer, Porsche drop dope-tainted Maria Sharapova

This isn't the first time a sports-person has been caught "doping" and have been dropped from brand endorsements.
But the case of Nike is different. Brand and image experts opine that an illegal activity by their endorser is indefensible. However, when an athlete or a celebrity is caught in an immoral activity which isn't strictly illegal, brands can tend to walk the fine line. This is the reason Nike didn't sever ties with footballer Wayne Rooney, Golfer Tiger Woods or Basketball player Kobe Bryant.

ALSO READ

Nike cuts ties with Maria Sharapova after failed Australian Open drug test

Similar Instances In The Past

It is not uncommon for brands to cut their ties with sports celebrities. There have seen such instances erupting constantly over the past couple of years.
One of the very prominent instances was when Tiger Woods’ sex scandal broke out. Brands endorsing him, such as Accenture, American Express, AT&T, PepsiCo, Gillette, Buick and Gatorade dropped their contracts with the golf star quickly. Tag Heuer, a week later, ended their association with Woods. Cumulatively, the golf star lost $22 million (about Rs 148 crore) in endorsements, according to a Business Insider report.

ALSO READ

Tiger Woods has some good years left in him, says World No 1 Jordan Spieth

However, five years later, Woods managed to bounce back. Some of the brands endorsements he currently has include EA Sports, Nike, Upper Deck, Net Jets, Rolex and TLC Laser Eye Centers, among others. Tag Heuer, that had ended its association with Woods, came back to sign him again, once he returned to the game. Even the largest motorcycle manufacturer in India -- Hero MotoCorp -- signed on Woods in December 2014 in a global sponsorship deal for $8 million (about Rs 54 crore), according to the Forbes report.
Nike, the same brand which was first to sever ties with Sharapova, was one of the few brands that stuck by his side. His sponsorship with Nike is still one of the biggest in the sports industry, with him receiving a portion of the $28.8 billion sales of Nike Golf apparel, shoes, golf equipment and golf balls, said the Forbes report. Woods now receives over $50 million (about Rs 336.4 crore) from deals with Nike, Rolex and Upper Deck alone.
One of England’s and Manchester United’s top footballers, Wayne Rooney, found himself in a sex scandal when he was caught cheating on his pregnant wife. This resulted in Coca-Cola and Tiger Beer ending their sponsorship deals with the star.
The deal with Coca-Cola was estimated to be 600,000 pounds (about Rs 5.7 crore). His other sponsorship deals at the time also included Nike and EA Sports.
Rooney too has managed to redeem himself. According to a recent Forbes report, the football star now earns 4.5 million pounds (about Rs 43 crore) through endorsements. Nike’s endorsement deal with Rooney is currently 1 million pounds per year (about Rs 9.6 crore). There are also rumours that the star might get a much larger deal from Adidas.
Renowned basketball player Kobe Bryant also lost out when his brand endorsements were severed after he was caught in a sexual assault case. Nutella, McDonald’s and Ferrero SpA ended their deal with Bryant after he was accused of sexually assaulting a 19-year old girl.
However, 10 years later in 2013, he had signed several new endorsement contracts, which included a fresh contract with Nike, to Lenovo and Turkish Airlines. He is estimated to be earning $20 million (about Rs 134.6 crore) in endorsements, according to a report by Fortune magazine.

Why Brands Do It Then?

So do brands lose out when they sever ties immediately after their brand ambassador gets involved in a scandal? Many of the brand experts that spoke to dna said that in a world wrapped around social media, brands feel it better to immediately distance themselves from a controversy as it attracts a negative image. Brands can always change their ambassador, they said.

Harish Bijoor, Brand Expert and CEO of Harish Bijoor Consultansts said, “At the end of the day, these brands are running a business. If a brand ambassador is attracting negative strokes due to a certain issue then it is better to get out.” He added that in the time of Twitter and social media, it does not take time to get negative impressions. “It is not like in the earlier days where it used to take time for negative impressions to be formed from a brand's association with a celebrity.

Similarly, Ramanjum Sridhar, Founder & CEO of Integrated Brand-Comm feels that many brands are hyper-sensitive about issues surrounding brand ambassadors due to the influence of social media. “Out of fear of a backlash on social media for having a particular celebrity as its endorser who is involved in a scandal, many brands choose to end ties. Though this may be an isolated action of a few people on social media, they still tend to be more careful,” he said.

K V Sridhar, Chief Creative Officer India, Sapient Nitro said that when brands are faced with such issues, some brands tend to look at whether what their ambassador has done is illegal or immoral. “Anyone who breaks the law, they have to be punished. So those that cheat in their sport or use substances to enhance their performance are doing things that are against the rules of the sport. In this way, the brand is right to dump their ambassador,” he explained.

He added that anything which is immoral legally can be defendable. A brand can choose to back their ambassadors despite being involved in sex scandals or issues with unethical behaviour.

An easier way to explain this is the way Nike backed Tiger Woods, Wayne Rooney and Kobe Bryant despite their involvement in sex scandals, choosing to be more concerned with their performance as an athlete. On the other hand, it chose to dump Sharapova and cyclist Lance Armstrong for their involvement in doping scandals which would impact their performance in the respective sports.

As to whether the brands' decision to end their sponsorship deals with Sharapova was prudent, only time will tell.

In the last few years, the printing technology has undergone a major shift, especially in the way printers are being positioned and marketed. Prominent brands in this space comprising of Epson, Canon and HP are no longer talking to office-goers as their focus has shifted to school kids.

The new Epson ad, which is currently running on TV, showcases a kid talking through printouts in order to highlight that a single printout is even cheaper than her toffee. HP has been stressing that with the help of their printers; kids can shine and get good grades in their school projects. Canon has been positioning their printers among these young decision-makers and their chance of becoming super students.

You can watch the videos here:

Epson: 

https://youtu.be/Y_muyj5eWdQ

HP: 

https://youtu.be/Qcy-mIyO668

Canon: 

https://youtu.be/Zm4FxMBkNi8

Elaborating on this shifting trend, Harish Bijoor, Brand Expert & Founder, Harish Bijoor Consults Inc said, “Kids are consumers, at times reckless consumers. Printing, school-work, creativity and learning are all adjunct categories. Kids carry assignments home and that requires a fair bit of printing. What crayons were for kids in the generation that grew up in the seventies, and what felt-tip pens were for kids in the generation of the eighties, printers are to the kids of today’s generation, and therefore, I think HP has it bang on”

Young decision makers take the centre stage...

A decade back, home computers were actually a very rare thing, but today it will be difficult to see an urban middle-class household without a computer.

 

Pranesh Misra, Chairman & Managing Director, Brandscapes Worldwide stated, “Schools are becoming increasingly tech-savvy and parents are also getting more competitive and are willing to invest a huge portion of their money in the education of their children. There is a huge opportunity for both laptops and tertiary businesses like printers to justify their investment in that sector. Also, printers are usually sold on the ‘loss-leadership’ formula, they are priced very low, and the real profit is in the ink and the ink cartridges. Therefore, here lies a huge opportunity to sell a product on the back of the whole thrust for education.”

Ramanujam Sridhar, Founder, CEO, Brand-Comm highlighted, “It has also become a trend in the metropolitan cities that schools have started assigning a lot of project based work. More and more parents are also getting involved in it. Like business schools, they are not accepting handwritten projects. Therefore, these kids form an important segment whose role is to influence their parents to buy. The printer companies are trying to shift their focus from B2B to the B2C space. They have outgrown the market in which they were functioning and are now trying to tap new customers. Also if parents want a print-out, they will get it from their respective offices, so ideally kids are the only ones who are working at home. Thus, they form the right target audience for the printer companies.”

Saurabh Uboweja, Founder, CEO & Chief Brand Strategist, Brands of Desire has an interesting take, “HP first launched a campaign in 2012 building on the insecurities of the parent's desire to see their kids secure top grades. They later kept building on it with new adaptations but the format remained similar--if you want top grades, use HP and by the way, we will be around if you need last minute print-outs in the midnight. Great consumer insight backed by research, resulted in profits for HP. Canon followed suit. But hey, wait a minute? What are they encouraging here- competition among kids by creating winners on who prints better? Wasting more and more paper, making use of toners which may not be fully bio-degradable?  The worst of all, when schools in India are finally beginning to wake up to skill based learning and life skills, they are supporting learning or the lack of it for grades? And all this on the back of an insight that builds on insecurities of children and parents. What happened to concepts like sustainability, community, social responsibility? I thought MNCs considered them important.''

Ad campaigns reflect the change...

Suresh Eriyat, Founder and Creative Director, Eeksaurus said, “For printer companies, office-goers and teenagers as a market has become saturated, they are therefore looking at a huge consumer segment comprising of school kids. Consumption in this category is quite high because schools today are demanding printouts and not handwritten projects. I feel that is the reason, we are seeing more number of communications which are talking to this segment of consumers.”

 

Prathap Suthan, Managing Partner and Chief Creative Officer, Bang in the Middle highlighted, “In most offices, printouts have become rare, they are exposed to the whole notion of eco-friendliness and the consciousness has seeped in, as a result of which the consumption has reduced on the industrial side. However, on the domestic side, be it the kids or the housewives, they are actually the ones who are using it. The kids take printouts to decorate their rooms or for their school projects, the housewives are either helping their children or are somehow using it to bring up their own skills. Therefore, for these printer companies, the home sector has become very important, which the ad campaigns have also started reflecting.

Amitava Mitra, Founder & Managing Director, Bee Advertising Private Limited cited, “The communication focus has shifted from business and commercial printers to home printers. This is the growing market and for commercial printers the focus is on the B2B market. However, the market everyone is targeting today is the home segment where the focus is on children and the activities they indulge in, which requires a lot of downloading, project work, visual referencing and printing etc. Such activities have created a huge demand for home printers and marketers are therefore focusing on this segment. So quality of the printing, richness and true to life colours and of course the price becomes a key reason for purchase, and therefore the communication focus areas.”

As per CMR research report 2015, HP (48% market share) is the leader in this segment, followed by Epson and Canon. Clearly the shift brought in by HP in the marketing strategy is now being followed by other players.

n the last few years, the printing technology has undergone a major shift, especially in the way printers are being positioned and marketed. Prominent brands in this space comprising of Epson, Canon and HP are no longer talking to office-goers as their focus has shifted to school kids.

The new Epson ad, which is currently running on TV, showcases a kid talking through printouts in order to highlight that a single printout is even cheaper than her toffee. HP has been stressing that with the help of their printers; kids can shine and get good grades in their school projects. Canon has been positioning their printers among these young decision-makers and their chance of becoming super students.

You can watch the videos here:

Epson: 

HP: 

Canon: 

Elaborating on this shifting trend, Harish Bijoor, Brand Expert & Founder, Harish Bijoor Consults Inc said, “Kids are consumers, at times reckless consumers. Printing, school-work, creativity and learning are all adjunct categories. Kids carry assignments home and that requires a fair bit of printing. What crayons were for kids in the generation that grew up in the seventies, and what felt-tip pens were for kids in the generation of the eighties, printers are to the kids of today’s generation, and therefore, I think HP has it bang on”

Young decision makers take the centre stage...

A decade back, home computers were actually a very rare thing, but today it will be difficult to see an urban middle-class household without a computer.

Pranesh Misra, Chairman & Managing Director, Brandscapes Worldwide stated, “Schools are becoming increasingly tech-savvy and parents are also getting more competitive and are willing to invest a huge portion of their money in the education of their children. There is a huge opportunity for both laptops and tertiary businesses like printers to justify their investment in that sector. Also, printers are usually sold on the ‘loss-leadership’ formula, they are priced very low, and the real profit is in the ink and the ink cartridges. Therefore, here lies a huge opportunity to sell a product on the back of the whole thrust for education.”

Ramanujam Sridhar, Founder, CEO, Brand-Comm highlighted, “It has also become a trend in the metropolitan cities that schools have started assigning a lot of project based work. More and more parents are also getting involved in it. Like business schools, they are not accepting handwritten projects. Therefore, these kids form an important segment whose role is to influence their parents to buy. The printer companies are trying to shift their focus from B2B to the B2C space. They have outgrown the market in which they were functioning and are now trying to tap new customers. Also if parents want a print-out, they will get it from their respective offices, so ideally kids are the only ones who are working at home. Thus, they form the right target audience for the printer companies.”

Saurabh Uboweja, Founder, CEO & Chief Brand Strategist, Brands of Desire has an interesting take, “HP first launched a campaign in 2012 building on the insecurities of the parent's desire to see their kids secure top grades. They later kept building on it with new adaptations but the format remained similar--if you want top grades, use HP and by the way, we will be around if you need last minute print-outs in the midnight. Great consumer insight backed by research, resulted in profits for HP. Canon followed suit. But hey, wait a minute? What are they encouraging here- competition among kids by creating winners on who prints better? Wasting more and more paper, making use of toners which may not be fully bio-degradable?  The worst of all, when schools in India are finally beginning to wake up to skill based learning and life skills, they are supporting learning or the lack of it for grades? And all this on the back of an insight that builds on insecurities of children and parents. What happened to concepts like sustainability, community, social responsibility? I thought MNCs considered them important.''

Ad campaigns reflect the change...

Suresh Eriyat, Founder and Creative Director, Eeksaurus said, “For printer companies, office-goers and teenagers as a market has become saturated, they are therefore looking at a huge consumer segment comprising of school kids. Consumption in this category is quite high because schools today are demanding printouts and not handwritten projects. I feel that is the reason, we are seeing more number of communications which are talking to this segment of consumers.”

Prathap Suthan, Managing Partner and Chief Creative Officer, Bang in the Middle highlighted, “In most offices, printouts have become rare, they are exposed to the whole notion of eco-friendliness and the consciousness has seeped in, as a result of which the consumption has reduced on the industrial side. However, on the domestic side, be it the kids or the housewives, they are actually the ones who are using it. The kids take printouts to decorate their rooms or for their school projects, the housewives are either helping their children or are somehow using it to bring up their own skills. Therefore, for these printer companies, the home sector has become very important, which the ad campaigns have also started reflecting.

Amitava Mitra, Founder & Managing Director, Bee Advertising Private Limited cited, “The communication focus has shifted from business and commercial printers to home printers. This is the growing market and for commercial printers the focus is on the B2B market. However, the market everyone is targeting today is the home segment where the focus is on children and the activities they indulge in, which requires a lot of downloading, project work, visual referencing and printing etc. Such activities have created a huge demand for home printers and marketers are therefore focusing on this segment. So quality of the printing, richness and true to life colours and of course the price becomes a key reason for purchase, and therefore the communication focus areas.”

As per CMR research report 2015, HP (48% market share) is the leader in this segment, followed by Epson and Canon. Clearly the shift brought in by HP in the marketing strategy is now being followed by other players.

- See more at: http://www.exchange4media.com/advertising/back-to-schoolhp-canon-epson-shift-their-communication-strategy-from-b2b-to-students_63592.html#sthash.l1YcbX8K.dpuf

n the last few years, the printing technology has undergone a major shift, especially in the way printers are being positioned and marketed. Prominent brands in this space comprising of Epson, Canon and HP are no longer talking to office-goers as their focus has shifted to school kids.

The new Epson ad, which is currently running on TV, showcases a kid talking through printouts in order to highlight that a single printout is even cheaper than her toffee. HP has been stressing that with the help of their printers; kids can shine and get good grades in their school projects. Canon has been positioning their printers among these young decision-makers and their chance of becoming super students.

You can watch the videos here:

Epson: 

HP: 

Canon: 

Elaborating on this shifting trend, Harish Bijoor, Brand Expert & Founder, Harish Bijoor Consults Inc said, “Kids are consumers, at times reckless consumers. Printing, school-work, creativity and learning are all adjunct categories. Kids carry assignments home and that requires a fair bit of printing. What crayons were for kids in the generation that grew up in the seventies, and what felt-tip pens were for kids in the generation of the eighties, printers are to the kids of today’s generation, and therefore, I think HP has it bang on”

Young decision makers take the centre stage...

A decade back, home computers were actually a very rare thing, but today it will be difficult to see an urban middle-class household without a computer.

Pranesh Misra, Chairman & Managing Director, Brandscapes Worldwide stated, “Schools are becoming increasingly tech-savvy and parents are also getting more competitive and are willing to invest a huge portion of their money in the education of their children. There is a huge opportunity for both laptops and tertiary businesses like printers to justify their investment in that sector. Also, printers are usually sold on the ‘loss-leadership’ formula, they are priced very low, and the real profit is in the ink and the ink cartridges. Therefore, here lies a huge opportunity to sell a product on the back of the whole thrust for education.”

Ramanujam Sridhar, Founder, CEO, Brand-Comm highlighted, “It has also become a trend in the metropolitan cities that schools have started assigning a lot of project based work. More and more parents are also getting involved in it. Like business schools, they are not accepting handwritten projects. Therefore, these kids form an important segment whose role is to influence their parents to buy. The printer companies are trying to shift their focus from B2B to the B2C space. They have outgrown the market in which they were functioning and are now trying to tap new customers. Also if parents want a print-out, they will get it from their respective offices, so ideally kids are the only ones who are working at home. Thus, they form the right target audience for the printer companies.”

Saurabh Uboweja, Founder, CEO & Chief Brand Strategist, Brands of Desire has an interesting take, “HP first launched a campaign in 2012 building on the insecurities of the parent's desire to see their kids secure top grades. They later kept building on it with new adaptations but the format remained similar--if you want top grades, use HP and by the way, we will be around if you need last minute print-outs in the midnight. Great consumer insight backed by research, resulted in profits for HP. Canon followed suit. But hey, wait a minute? What are they encouraging here- competition among kids by creating winners on who prints better? Wasting more and more paper, making use of toners which may not be fully bio-degradable?  The worst of all, when schools in India are finally beginning to wake up to skill based learning and life skills, they are supporting learning or the lack of it for grades? And all this on the back of an insight that builds on insecurities of children and parents. What happened to concepts like sustainability, community, social responsibility? I thought MNCs considered them important.''

Ad campaigns reflect the change...

Suresh Eriyat, Founder and Creative Director, Eeksaurus said, “For printer companies, office-goers and teenagers as a market has become saturated, they are therefore looking at a huge consumer segment comprising of school kids. Consumption in this category is quite high because schools today are demanding printouts and not handwritten projects. I feel that is the reason, we are seeing more number of communications which are talking to this segment of consumers.”

Prathap Suthan, Managing Partner and Chief Creative Officer, Bang in the Middle highlighted, “In most offices, printouts have become rare, they are exposed to the whole notion of eco-friendliness and the consciousness has seeped in, as a result of which the consumption has reduced on the industrial side. However, on the domestic side, be it the kids or the housewives, they are actually the ones who are using it. The kids take printouts to decorate their rooms or for their school projects, the housewives are either helping their children or are somehow using it to bring up their own skills. Therefore, for these printer companies, the home sector has become very important, which the ad campaigns have also started reflecting.

Amitava Mitra, Founder & Managing Director, Bee Advertising Private Limited cited, “The communication focus has shifted from business and commercial printers to home printers. This is the growing market and for commercial printers the focus is on the B2B market. However, the market everyone is targeting today is the home segment where the focus is on children and the activities they indulge in, which requires a lot of downloading, project work, visual referencing and printing etc. Such activities have created a huge demand for home printers and marketers are therefore focusing on this segment. So quality of the printing, richness and true to life colours and of course the price becomes a key reason for purchase, and therefore the communication focus areas.”

As per CMR research report 2015, HP (48% market share) is the leader in this segment, followed by Epson and Canon. Clearly the shift brought in by HP in the marketing strategy is now being followed by other players.

- See more at: http://www.exchange4media.com/advertising/back-to-schoolhp-canon-epson-shift-their-communication-strategy-from-b2b-to-students_63592.html#sthash.l1YcbX8K.dpuf

Back to school: HP, Canon, Epson shift their communication strategy from B2B to students

Author | Sarmistha Neogy | Monday, Mar 07,2016 8:21 AM

- See more at: http://www.exchange4media.com/advertising/back-to-schoolhp-canon-epson-shift-their-communication-strategy-from-b2b-to-students_63592.html#sthash.l1YcbX8K.dpuf

Patanjali Ayurved & the rise of the Rs 2000 crore Vedic Empire

 

Patanjali Ayurved could be the fastest growing consumer goods company in India, as per a report by research firm CLSA. Its revenue has grown from about Rs.450 crore in 2011-12 to over Rs 2,000 crore by end of 2014-15.  The company has managed to achieve this as it directly sources from farmers without any middlemen in the picture and pays modest salaries to employee.

 

Elaborating on this, Harish Bijoor, CEO, Harish Bijoor & Consults explains, “Patanjali Ayurved is a huge success based on the strength of its product offering, and more importantly its positing stance is holistic, real and ‘back to the Vedas’ in many ways. Price has certainly helped, but what is important to notice is that the product has lived up to its promise every time. I recently asked an audience in Ahmedabad as to how many of them had Patanjali Dant Kanti in their bathrooms. Around 5% hands went up. The next question I asked: how many have a Patanjali product in their home: 90% hands went up. That's the success of Baba Ramdev, Balakrishna and Patanjali Ayurved.”

 

Riding on Baba Ramdev’s popularity

The brand is undoubtedly riding on Baba Ramdev’s popularity, who reportedly doesn’t own any stake in the company.  Sridhar Ramanujam, Founder CEO, Brand-Comm undeniably gives credit to Baba Ramdev; “Thanks to his yoga programme and dabble in politics he has a wide reach. Most people associate him with ‘healthy’. He has an instant recognition that works as a personal brand.”

 

Anand Halve, Co-founder and Director, Chlorophyll, has an interesting take, “Long before there was brand and marketing, Baba Ramdev saw that there was a huge appeal for health related products build around 'Indian principles', when he saw the growing appeal of yoga etc. While the MNCs were bringing in their international products (for example L'oreal, Paris) or adding little bits of Indian ingredients (for example Garnier with neem), Patanjali built a focussed ayurvedic brand. So it was not about branding and marketing, but about building a business which at the heart of it had Indian thinking and ingredients.”

 

Ramanujam feels the yoga guru is the reason behind the brand recall, he says, “Although there’s some advertisement but it’s nowhere close to what other biggies are spending. Look at its wide product range it has built in such a short span of time. Now we will see how they continue to carry forward this momentum. Hope it succeeds.”

 

Samir Kumar- Head of Creative Strategy, Brand Harvest feels that the Patanjali Ayurved must have found it imperative to gain consumer’s trust. “Baba Ramdev brought yoga to grassroots level. That’s where he built his equity.  Around the same time he was into Ayurveda and health consultation where he saw his market. The brand built trust around the premise that they are not in this to make business. They are leveraging on the trust and cost competitiveness. Overall its roots led it to where it stands now,” he added.

 

Timing it right

Marketing experts feel that timing has also worked in Patanjali Ayurved’s favour with the growing awareness on well-being and shift towards lifestyle centred on ayurveda. “If the products were launched 15 years back the response wouldn’t have been so heartening. Mood of the country is focused on being healthy,” says Ramanujan, adding that “Patanjali has a clear understanding of what works in India. They know the pulse of the consumer very well.”

 

Kumar shares his opinion, “Considering the image it has built for itself around purity, ayurveda and yoga, it has helped the brand in its successful marketing in a big way.”

 

Banking on Maggi controversy

 

Patanjali Ayurved also took the opportunity to cash in on the Nestlé’s Maggi controversy last October. It launched its own instant noodles hoping to capture the market with Baba Ramdev even claiming that it would overtake Maggi as the top noodles brand in the country.“

 

There must have been a certain shift. Maggi has worked extensively to make it to the grassroots while Patanjali already has a strong equity over them. Hence it’s easier for this section to ditch Maggi and take up Patanjali. This will benefit the latter. When it comes to urban audience where Maggi has a strong equity compared to Patanjali, they are not likely to shift loyalties,” shares Kumar.

 

Halve also approves the move, “If Unilever can launch ayurvedic products, why can't Patanjali launch noodles? And the Maggi controversy just offered a ‘supply shortage’ window of opportunity to satisfy customer demand.”

 

But Bijoor has a different take, “Out of everything that Patanjali offers, I think its weakest link is noodles. It has given it a high profile, but I do believe this was a faulty entry.”

 

Looking at the long run 

 

Ramanujam is very upbeat about Patanjali as a brand and how its entry has stirred the FMCG segment, “Consumer benefits with the entry of a new player with their wide range of products and attractive pricing. This is early warning signals for the multinational brands to get their pricing right.”

 

He believes that as a big sustaining brand, Patanjali is here to stay but it needs to be cautious, “Patanjali has to be on guard as their gains won’t be easy compared to their early days because the multinational giants have started noticing them.”

 

According to Kumar, for the brand to survive it needs to rise above Ramdev Baba’s personal image. “Depending on the market it will rise for a certain span of time. But in the long run it has to shift out of the personal equity of Ramdev Baba on which the brand recall is built on. It needs to move to the whole equity of trust and ayurveda, otherwise the brand will die with him.” For this he also suggests a strategy, “Perhaps it needs to get into conventional marketing like other FMCGs which will truly test its mettle.”

 

But no one can deny the hustle it has created with its presence and emergence. Like Bijoor points out, “Patanjali Ayurved is creating a tectonic shift in the marketing space of India. And the journey of this alternate force in Indian FMCG space has just begun.

• Advertising
• Marketing
• Media
• Videos
• Events
• Jobs
• IPL

- See more at: http://www.exchange4media.com/marketing/patanjali-ayurved--the-rise-of-the-rs-2000-crore-vedic-empire_63578.html#sthash.TH3lYD0w.Sq0XrQTl.dpuf