Monday, July 07, 2008
Financial sector Brand Overhaul
By Harish Bijoor
Q: There is a lot of brand over-haul action in the Financial Services sector in recent times. Why?
-J.S.Gill, New Delhi
A: Gill-‘saab’, the Financial Services sector is just at the take-off stage in India. Gone are the days when this sector operated at the realm of lowest common denominator products such as necessity based bank loans, basic broad spectrum Insurance and products of the kind.
Today, India is on the boom mode. The market is definitely much younger than it was ever before. The demand for financial products and solutions is very different. In this era, the young investor is looking at brands he can trust. These brands could be brand offerings that come from the traditional banking sector, the traditional insurance sector or even from the new and emerging entrants coming in from overseas markets after enjoying deep equity there.
The brand is very important here. I define the brand as a thought. A thought that lives in people's minds. This "thought" is what is being re-jigged and leveraged today by most players in financial space.
Older players such as LIC of India, RBI, Canara Bank, Syndicate Bank and indeed a plethora of old banks are all looking at re-jigging image to ensure that they stay contemporary for the young investor. At the same time, they have plenty to leverage from their heritage which is a crucial factor to count.
These brands surely want to stand out from the clutter all around. Also, when you have a Bank of Baroda re-branded, all other banks of the same vintage will start looking older and more fuddy- duddy than BOB if they don't quickly do something.
I do believe all banks will go in for an overhaul. Later than sooner.
Q: ITC Foods is getting into everything all at once. Do you think it is a good idea to enter into so many segments such as foods, personal care, snack foods and household products all together?
-Dhriti Kapoor, Mumbai
A: Dhriti, good question.
A company can typically enter different verticals over a period of time, or all of a sudden, all together. One is the traditional approach and the other new.
I think the ITC foods idea is a great idea. This piece of marketing strategy from the house of ITC is all about "Shock and Awe". Shock the market with your bluster. Shock the market with your range. Shock it with wide distribution. Shock it with a status that speaks not of a new launch, but of an aggressive player with deep pockets who can outdo the best guy in the market.
The market is shocked first. So is the market leader. The consumer is put into a state of awe. Every piece of advertising and market promotion makes the ITC product look larger than life. This helps.
The bottom line for ITC will bleed in the short run for sure. Brand break-even cycles will be very elongated, but short term consumer interest will be high. Converting these early customers and early adopters of the brand into loyal customers is yet another task. A task that requires a different set of inputs.
More the segments the company enters, more mega the feel. More the ubiquity of its brands in the kitchens, bedrooms, drawing rooms and bathrooms of consumers.
Q: What is the true value of the tag fo a heritage brand? Does it count?
-Rohit Surana, Bangalore
A: Rohit, the tag of heritage brand is a valuable one to possess. This tag is time-centric. The more time that passes, the richer the heritage strokes.
The heritage tag becomes part of the brand identity kit. And like Amul, it can be used in macro advertising stances such as Amul's "The taste of India" campaign and Red Label Tea's "Desh ka pyaala"!
One more valuable point is the fact that we must remember that the world will come round to retro thinking sooner or later. It is already happening in the realm of cars. People want to own cars that look different and old. This movement is going to spread. People will want to be seen eating and drinking and using brands that have a retro feel in the future. At this point of time, the heritage brand tag is a valuable one to monetize. Either right now, or sometime in the near to medium term future.
Q: What is the difference between business ethics and philosophy of business?
-Pankaja D, Trichy
A: Pankaja, philosophy of business is the macro. Business ethics are a sub-set of this.
Business philosophy is the vision of the organization at large. Business ethics are part of the mission. Both seamlessly fit into one another.
Both play a role in defining an organization, its culture and its consumer-articulation processes.
Harish Bijoor is a business strategy specialist and CEO, Harish Bijoor Consults Inc.