Friday, July 13, 2012
Kingfisher, coffee and tea...
Is Kingfisher Kaput?
By Harish Bijoor
Q: I’m
curious. What’s next for Brand Kingfisher? Is it all over?
-Samantha
P Cox, New Delhi
A: Sam, good to be curious on the whole.
Kingfisher is a dominant brand in the Indian
context. The brand for a start is a beer. And from there on has developed the
brand equity of brand kingfisher airlines. To that extent, the recent set of
issues in aviation tends to hurt the equity of Kingfisher airlines more than
the beer. The airline is a service brand that touches the lives of hundreds of
people. The beer is a product brand. To that extent there is less of an issue
there. There is no transference of negativity from aviation to beer for sure.
The negative publicity that hits Kingfisher airlines is really about the pains of the traveler more than anything else. A traveler faced by flight cancellations at the last minute is impacted the most. This is where the biggest pain point of the brand equity of Kingfisher airlines lies.
Public memory is however short. Do believe me, but this proverbial short public memory is a brand’s best friend.
To that extent, all the current woes of Kingfisher Airlines will be forgotten faster than we do believe it will. Remember all the issues that Jet Airways went through, with its employees protesting and venting their ire in public on national network television? Everything is forgotten today. Everyone lives happily ever after. Till the next fracas.
In reality nothing succeeds like success. I do believe this is a temporary blip in the brand equity fortunes of Kingfisher Airlines. With some degree of fund infusion, it will be business as usual. Just wait and watch for FDI in the aviation sector, and you will see the King of good times soar again. And how!
Right now, Kingfisher needs to get off the pedestal of being a brand and talk and emote with its users and those sitting on the fence of its usage. It is important to be transparent and admit folly where folly lies.
The Kingfisher brand is one that has been designed carefully with a lot of patience and passion. It would be unfair to write it off so soon and so quick.
Q: Nokia is still topping brand
charts in India despite its completely low growth and loss of market shares.
How?
-Seenu Venkatesan, Mumbai
A: Seenu, the reason why Nokia does get repeatedly listed in the top ten is simply because of what I call the "ubiquity effect". Please do note that the largest numbers of mobile handsets in use as of now in India is quite likely to be the Nokia handset in the middle and upper-end segment. Add to it the fact that the mobile phone is a 24 X 7 device that people do not switch off even when they sleep. Mobile phones live closer to people than their own wives and husbands do.
This ubiquity gives a halo effect to the brand that is used by most.
Many swear by their mobile phones. Many can't stay away from them. Many touch
them a lot more than they touch their spouses. And a lot more intimately even. This
proximity adds to the halo effect of the hand-phone brand. And Nokia is a
benefactor, as of now. Give it five years more for the Samsung effect to set
in. Samsung is the next big guy lurking round the corner.
Q: How do coffee Café chains globally
ensure consistency in terms of delivery? And what is the learning for me to
take?
-Rohinton P Malla, Mumbai
A: Rohinton, the issue is all about scale. Once scale develops, you can look at central sourcing. And central sourcing is all about consistency offerings. Starbucks and Dunkin Donuts globally believe in the mechanics, efficiency and delivery of central sourcing. Their systems are totally integrated to technology and what it can deliver in terms of back-end efficiency.
What is it that you can learn from the business model of Starbucks or Dunkin Donuts then?
From Starbucks, Indian companies can learn the power of a brand and the power of consistency delivery, the power of pulsating with the consumer mind, mood and movement. From Dunkin Donuts, the best thing to learn is the fact that the consumer has little time to sit and dawdle in the future. On-the-go coffee is a format whose time will come in the future. Prepare for it aggressively and morph your sit-down models to talk the language of stand-up and on-the-go coffees as well.
It is important to remember that every Cafe market has a glass ceiling. This glass ceiling is all about saturation in terms of numbers, boredom with ubiquity, lack of differentiation, the consumer in a state of recession, and a continuous lack of value-for-money propositions. Most Western markets have reached this level over the last three decades. India to that extent is still a nascent Cafe market and this is a market that will grow. Café Coffee Day, the market leader has shown us that success can be made to happen.
Q: How is tea such a big drink in India, far bigger
than coffee?
-Sapna Khanna, New Delhi
A: Sapna, tea is India's favorite beverage. The per capita consumption of tea is a multiple of 11 to that of coffee. India's mass beverage of choice is tea.
All this has happened progressively over the decades with the painstaking effort of the early companies in this space that did yeomen work. Brooke Bond and Lipton were the two companies that did hard work in this space.
The heritage of
tea plantations run to painstaking British norms in the North East regions of
the country helped establish an origin status for tea as well. Early work in
this space had pioneer marketers go village to village in the country to
popularize the drink. The edifice of tea consumption was built brick by brick
with painstaking marketing effort. I would call this early tea evangelism. That
created this big status for tea in India.
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Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.
Email:harishbijoor@hotmail.com
Labels: ADVERTISING, branding, Brands, India, Kingfisher, Liquor, Twitter
Wednesday, May 02, 2012
Of Kingifsher, Apple, Brand-valuation and Brands
Tangibilizing the Intangible
By Harish Bijoor
Q: With the Kingfisher brand
being valued recently, the question in mind is what are the parameters under
which brands are valued? How do you arrive at a monetary value? Who decides?
-Purnam Venketeshwara,
Hyderabad
A: Purnam, brand valuation is an objective exercise done with the subjectivity that the brand valuing organization, its peoples, consumers of the brand and the current environment in which the brand lives bring to the table. In this rather complex exercise, one looks at current financial strength, potential value and future earnings. In addition one is looking at consumer strength the brand enjoys. The more consumer-centric you make the exercise, the more subjective it gets, and the more financial statement oriented you make it, the more objective it gets. Both have their own pitfalls though.
In many ways, intangible assets are
tangibilized by sensible and neutral brand valuation exercises.
Brand valuation is however not a one-time exercise. It is good to do it
on a continuous basis. We run brand valuation exercises on a continuous panel
basis for years together. It is quite like the ECG readout every one of us must
get. It tells you realistically the state of your brand health. It helps peg a
number to all the notions that may abound in businesses. It is however an
ever-changing number, quite like your Blood Pressure count.
Q: Apple is not really aggressively
advertised in India. Despite that it is a big brand. Why and how?
-J Ratna Sabapathi, Chennai
A: Sabapathi, Apple is the gold standard brand in the telecom handset market. The allure of an Apple is much beyond advertising. The brand depends heavily on peer group influencers in the market. To an extent, the Apple device is slowly but surely becoming a ubiquitous cult symbol in the hands of the young. Something that is beyond advertising. If I am to use Pharmaceutical language, the brand is prescriptive. Prescribed by the peer. And this peer-to-peer prescription holds immense value. Much more value than mere advertising tout.
Q: How have brands evolved in India? Can you help me trace history?
-Romi Malhar, Mumbai
A: Romi, you
are asking the biggest question of them all. Difficult to do this in all of 300
words. Will attempt this though.
Brands have evolved from being basic offerings
that touched the largest numbers to specialized offerings that touch niches
today. In between these two movements, there lie whole sets of stories that
indicate an evolutionary process that has kept pace with the Indian consumer.
As the Indian consumer has gotten more and more adventurous, brands have kept
pace.
In the beginning, brands were all about the things we ate and drank. Then they got into the realm of what we wore. And then into realms those touch our lives and make them happen, stuff like education and Medicare and more. In each of these categories, branding happened only at the top end of each category. The bottom end remained a commodity. Over a period of time however, the brand started touching the bottom-rung entities in each category as well. Take tea for example. The category had a large loose tea orientation in the days gone by. Today, literally every tea is a branded option. The movement climbed top down and not bottom up, as has happened in other countries. The same is the case with salt and every ingredient and eatable there is. Stretch this to beverages as well...and you have a pattern.
The economy and its affordability indices spurred this on as well. As more and more money started getting the spend-tag of being a disposable income, more and more brands came in. The movement from cycles to mopeds to motorcycles to small cars to big cars is yet another aspect of this evolution. As India went through adjunct categories such as mopeds, the economy signified that it was in its adolescence. Products were kid products, adolescents and then mature products. The cycle is a kid product, the moped that of an adolescent India and the motorcycle of a grown up India.
Have brands kept pace with change? Not really. Brands have watched consumers evolve and have offered them products. The early ones which offered mature-market products had a bad time and a long gestation period towards profits and break-even. Therefore, most others learnt the tough way and did things as consumers wanted them, rather than give things that consumers might want. The Tea bag evolution on India is a classic example with Taj Mahal tea bags doing evangelical work and struggling with lack of profits for as long as 20 years.
Harish
Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.
Email: harishbijoor@hotmail.com
Labels: Apple, Brand-valuation, Brands, Kingfisher
