Thursday, July 03, 2008


Brand Recalls

Of Calls and re-calls

By Harish Bijoor

Q: The recent Nokia battery recall exercise has hurt brand Nokia. Am I right?

-Vinay Prasad, Chennai

A: Vinay, there are product advisories and then there are product recalls. Product advisories are softer options marketers use to pull out erring products from the market. At times they use the product advisory as a cautionary mechanism in markets. The Product recall exercise on the other hand is a more serious issue.

The recent issue with the Nokia battery (I wonder whether we should call it the Matsushita battery issue, as the manufacturer is Matsushita) has had several opinions floating around.

Let’s take this case point by point.

Firstly, I do believe the company has done right. Nokia has acted in the best traditions of responsible corporate behavior. When in doubt, go ahead and clear the entire issue. Clear out every battery of the default batch and purge the headache, or even the potential of a headache in the future.

Having done that, do I believe that brand Nokia has taken a bit of a beating in the Indian market because of this exercise?

Well, while from the manufacturers point of view, while everyone is going to town saying that brand Nokia is not hurt at all, particularly as customers respect responsible behavior in markets, I personally do not subscribe to this view.

Let me explain. The brand is a thought. Brand Nokia is a thought. A thought that at once brings forth images of a good product, an efficient product and a truly world-class offering. A market-leader in its space. This thought, I am afraid, is sullied. Soiled if not sullied. Shaken if not stirred.

Consumers in the developed markets of the world sure do appreciate responsible corporate behavior from marketers. I am however not sure if the same prevails in less developed consumer markets such as India.

Let’s remember that in the Indian market there are disctinct layers. The top creamy layer comprises of consumers who are as connected to the world as any. They are consumers who are self-actualizing consumers who appreciate the Nokia pull out and appreciate preventive actions that could cost the company lots in terms of money(an estimated Rs.8 Crore in this case for Nokia). All in the interest of public safety. And company liability of course.

The next layer is the middle layer of consumers. This layer is functionality oriented, and is happy that the battery is getting replaced. This layer will harbor a bit of a doubt on the brand name Nokia in future. This segment will want to investigate more than the phone alone in future. Dealerships where these people buy phones from will be inundated with queries regarding battery safety in the near future for sure.

The third layer is the bottom end of the market. This is a more suspicious layer of the market. This is not such a well-informed segment as well. It is here that rumors will abound. It is here that competitors will make hay of the issue at hand. Acts of responsible corporate behavior will not get the kind of appreciation in this segment of the market as they do get in the other two layers. Out here, if you have done wrong, you will be punished. Punished unfairly even.

Brand Nokia sells to each of these segments. Brand Nokia needs to manage its image at each of these layers with a different and segmented approach. The task has just begun. The residue of discontent will remain for a while, I am afraid.

Q: How does a heritage brand happen? What are the qualities that a brand requires to be a heritage brand?

-Vani Shottam, Coimbatore

Vani, heritage brands need to essentially be mass brands. Brands that are accessible to the largest numbers of people. To that extent, in the pyramid of brands, heritage brands are brands that fall in the middle and lower end of the pyramid rather than the top end. Therefore a Hugo Boss will not be a heritage brand. Instead, it is the MTR pickle and the Liv 52 from Himalaya and the Woodward's Gripe water that will qualify better for the status.

The heritage brand is one that stands the test of time, generations of use, generations of utility, and a rather intrinsic relationship with consumers, never mind their age. A Cadbury Dairy Milk would figure in this list as well...on this count.

To stand the test of time, a brand needs to maintain an impeccable line of quality. The brand needs to have had no major incidents of any kind that could plant a scar on its image, must be reasonably ubiquitous in its utility, must be solution oriented and not image-oriented alone (a biscuit versus Swarovski crystals), must be a basic item and not a fad that comes and goes (like a Covo chocolate spread or the Tazo), must be wholesome in its goodness appeal, and preferably taste-driven. This taste could be real taste as that of the tongue, or otherwise.

Q: How important is the physical shopping experience at a store to increase sales volume? Or is this a myth of organized retail?

-J J Pinto, Mumbai

A: Dear Pinto-ji, shopping is a hugely sensorial experience at large. The sensorial experience happens at the level of the visual, the audio, the sense of smell, and more.

Offering a sensorial shopping experience provides the space and environment for the consumer to relax and let loose his/her shopping-lust.

There is data that we have on hand that says that the actual shopping experience that is positive helps push up top line revenue at the outlet by as much as 65%. And that’s big!


Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults

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