Post on 26-Apr-2018
BRANDS AND THEIR MAJOR DIMENSIONS – A CONCEPTUAL
FRAMEWORK
INTRODUCTION
The last chapter presented the review on literature on various studies
conducted on brand and brand extensions. This chapter focuses on the conceptual
framework of branding. It is followed by the various branding strategies followed by
the companies‟. Brands, brand extensions and its various dimensions and their
interrelationships are discussed in detail in the next section. Finally, a sketch of the
present Indian consumer and the current position of Indian FMCG brands are given.
History of Branding
“Buildings age and become dilapidated,
Machines wear out,
People die,
But what lives on are Brands”.
Branding has come a long way in India and also around the world. The word
brand comes from the word “brandr”, a word used by early Norse tribesmen meaning
„to burn‟, as in branding livestock to declare ownership. No doubt, anyone who has
read cowboy stories is familiar with the concept of branding cattle.
For some 4000 years, branding irons have been used as means of identification
and mark of ownership (sloanbrands.com). As far as 5000 B.C, distinctive marks were
used on pottery, similar to what we call brands today. However, these ancient brands
identified the owners of the products rather than the manufacturer. (Montameni &
Shahrokhi, 1998). The ancient Romans, Greeks and Egyptians branded not only their
livestock but criminals and slaves as well. It is generally believed that Hernando
Cortez introduced branding irons to the new world in 1540. (sloanbrands.com). In the
twelfth century, the use of brands became a common usage. (Montameni &
Shahrokhi, 1998).
Over time, branding of cattle became not just mark of ownership but also of
quality. In the Chicago meat market, buyers recognized quality beef through the brand
mark on the cattle. This was because the ranches which produced better quality of
meat did so as it implied –better grass or more adequate supply of water, better living
conditions for the cattle or a shorter journey to the meat market. No longer was „meat
on the hoof‟ a commodity, it was „branded‟ and the better quality was recognizable.
In the earliest form, a brand mark defined quality, a mark which differentiated
a quality product from other similar products. Many years ago, in the Soviet Union,
when products were sold under a generic name, the factory manufacturing the product
had to mark its identity on the packaging. Customers soon realized that a detergent
powder produced in one factory was superior to another in quality. Eventually,
housewives would turn the packaging around while purchasing to identify the origin
of the product and make their choices on the basis of its manufacturing location. The
serial number of the factory had become a brand as it is differentiated from other
similar detergents, which, according to the state, were supposed to be identical in
formulation and in every other way. This is similar to the Nirma story where the brand
name was the only differentiator between totally similar products in the Ahmedabad
market in the early 1970‟s.
Branding -The Real Meaning
Branding means much more than just giving a brand name and signalling to the
outside world that such a product or service has been stamped with the mark and
imprint of an organisation. The real aim and object of the concept „branding‟ can be
gathered from the following analyses.
1. Branding consists in transforming the products category:
Brands are a direct result of the strategy of market segmentation and product
differentiation. As companies seek to cater to the expectations of specific customers,
they focus on providing the latter with the ideal blend of attributes- both tangible and
intangible, functional and hedonistic, visible and invisible- under viable economic
conditions for their businesses. The first task of brand analysis is to define specifically
all that the brand injects into the product and how the brand transforms it.
Therefore, it depends on:
The materiality of the attributes.
The advantages created.
The benefits that emerge.
The obsessions it represents.
This salient objective of the brand concept is often forgotten. For
manufacturers, the quality of the brand is secondary and they sadly fail to ensure added
attributes and advantages to the consumer. Thus, the brand is condensed to simply a
package and label. Branding is not being on the pinnacle of something, but within
something. The product or service thus enriched must position itself well if it is to be
spotted and adopted by the potential buyer and if the company wants to harvest the
benefits of its strategy.
A brand not only merely acts on the market, but also it organises the market,
driven by a vision, a calling and an apparent design of what the category should
become. Numerous brands wish only to identify completely with the category of the
product, thereby expecting to control it. In fact, the brand name often dissolves within
itself. For instance, Vicks Vaporub, Iodex cream have become generic names for
categories of products.
The brand name endows the product with its own separate identity. In concrete
terms, it means that the brand is strong when the product is transparent. Consumers
want to perceive that the brand has an imperceptible added value. Generally speaking,
anything adding to the intricacy of ingredients also contributes to creating distance
among similar products. In this respect, Coca-Cola is doing the right thing by keeping
its recipe a secret.
2. A brand is a long- term vision:
The brand should reflect its own identity with regard to the category of the
product. Major brands have more than just a precise or dominating position in the
market; they hold convincing positions within the category of the product. This
position and concept both invigorate the brand and feed the transformations which are
implemented for matching the brand‟s products with its ideals. It is this concept which
justifies the brand‟s existence, it is the reason for being on the market and this provides
it with a guideline for its lifecycle. The company‟s ultimate goal is unquestionably to
generate profit and jobs. But brand purpose is something else. Brand strategy is too
often wrongly construed for company strategy. The latter most often results in truisms
such as „increase customer satisfaction‟. Naturally, a brand draws its strength from the
company‟s financial and human means, but it derives its energy from the specific niche
it occupies in the product category. A brand builds up steadily from this niche. If it
does not feel driven by an intense internal need, it will not carry the potential for
leadership and energy.
The design of brand image does not necessarily capture this dynamic dimension
with the desired clarity, which is demanded by modern brand management; the features
of its image will merely result from the vision, the rationale.
Major brands can be compared to a pyramid. The top states the brand‟s vision
and purpose- its conception of automobiles for instance, its idea of the variety of cars it
wants, and has always sought for, to create, as well as its very own values which either
can or cannot be articulated by a slogan. This level led to the next one down, which
shows the general brand style of communication. Indeed, brand personality and style
are conveyed less by words than by a way of being there in the market and
communicating. The next level presents the brand‟s strategic image features;
amounting to four or five, they result from the general vision materializing in the
brand‟s products, communication and actions. For instance, the way Santro is
positioned as a „family‟ car. Lastly, the product level, at the bottom of the pyramid,
consists of each model‟s positioning in its respective sub market.
Fig: 3.1
Source: Kapferer J.N, “The New Rules of Brand Management , Strategic Brand Management”pp-46-58
Constantly changing Brand diversity.
It has been observed that branding is nothing but a device used in trying to stick
out in a market inundated with barely different products. This view fails to take into
account both the time factor and the rules of the contest. Brands draw interest through
the products they produce and bring into the market. Any growth made rapidly
becomes a standard to which buyers grow habituated. Competing brands must then
accept it themselves if they do not want to fail market expectations. To begin with, the
pioneering brand will thus be able to enjoy a fragile monopoly, which is bound to be
swiftly challenged unless the innovation is or can be patented. The function of the
brand name is specifically to guard the innovation, it acts as a psychiatric patient, by
Brand
Vision &
Purpose
Brand Values
Strategic product common traits
(4 or 5 prioritised)
Brand tone codes &
Personality
Product Product….. Product
A B N
Typical actions
Outside of Brand Territory Outside of Brand Territory
Permanent fluctuations of the market. Evolution of competition, life-
styles, technology
The Brand System
becoming the archetype of the new segment it creates – it has the advantage of being a
pioneer. Brands allow innovators brief exclusiveness and reward them for their daring
attitude. Thus, the accretions of these transitory differences serves to divulge the
meaning and reason of a brand and to validate its fiscal function, hence its price
premium. Brands cannot, therefore, be reduced to a mere sign on a product, a mere
graphic cosmetic touch: they guide a creative process.
3. A brand is a living memory
The spirit of a brand can be inferred through its products and its promotion. The
substance of a brand grows out of the collective memory of these acts, provided, they
are governed by a unifying idea or strategies. The importance of memory in the
creation of a brand explains why individual preferences endure: within a specified
generation. People persist, even twenty years later, to fancy the brands they liked
between the ages of seven and eighteen. It is precisely because a brand is the memory
of the products that it can act as a long-lasting and stable reference. Unlike promotion,
in which the last message seen is often the only one that beyond doubt registers and is
best recalled, the first actions and message of a brand are the ones bound to leave the a
genuine impression, thereby structuring long term acuity.
4. A brand is a genetic programme
A brand is both the reminiscence and the prospect of its products. “The analogy
with the genetic memory is central to understanding how brands function and should be
managed”. By understanding a brands framework, it is possible to sketch not only its
justifiable terrain but also the region in which it will be able to grow further than the
products that initially gave birth to it. The brands‟ core programmes indicate the
rationale and significance of both the past and the upcoming products. This programme
can be discovered by analysing the brand‟s earlier production, communication and
significant actions, since its initiation. If a principal or an inherent stability exists, then
it must show through. Research on brand identity has a dual purpose; to analyse the
brand‟s production on one hand and on the other to analyse the reception, that is, the
image that is created in the market. The image is undeniably a memory in itself, so
unwavering that it is difficult to modify it in the short- run. It also has a function: to
build enduring references, that steer consumers among the abundant supply of
consumer goods. Thus, in men‟s and women‟s readymade garments, each brand is
labeled and catalogued. That is the reason, why a company should never avert from its
image, which alone has managed to draw all the loyal buyers and all the new ones, that
is the consistent ones for the future. Customer loyalty is shaped by respecting the brand
features that originally seduced the buyers. If the product slackens off, weakens or
shows a lack of investment and thus no longer meet the customer expectations, the
company should rather try to meet them all over again than to change expectations. In
order to build customer allegiance and capitalise on it, brands must stay true to
themselves.
5. Brands endow products with meaning
Products are mute; the brand is what gives them meaning and purpose, telling
us how a product should be interpreted. A brand is both a prism and a magnifying glass
through which products can be decoded. Hyundai‟s Santro has named its car as „The
Sunshine car‟ which reflects the meaning of „a bright and glowing car‟. On one hand,
brands guide our awareness of products. On the other hand, products send back a hint
that brands endorse and build their identity. Brands can only develop through long term
steadiness which is both the foundation and manifestation of its identity. Hence, similar
technology used will not bear the same meaning for two different companies, say car
makers.
Brand identity is not an outcome of a detail, yet a detail can, once interpreted
serve to support a broader strategy. Details can only have an impact on brands identity
if they are in synergy with it, echoing and amplifying the brand‟s values. That is why
weak brands do not succeed in capitalising on their innovations: they do not manage to
either enhance the brand‟s meaning or create that all important resonance.
In fact, consumers appraise innovations rarely in a remote way, but with regard
to a specific brand. Once a brand has engaged in a definite contract, it has to assume all
of its insinuation and realize its promises. Brands should value the contract which has
fascinated customers and made them triumphant.
6. A brand is a contract
Brands become trustworthy through persistence and repetition. Eventually, their
programme steadily commits them to the long- term view. By creating approval and
loyalty, the programme undeniably forces the brand to accomplish the quasi- contract
that binds it to the market. In return the market is likely to view the brand‟s imminent
products favorably from the launch. This shared commitment explains why brands,
whose products have momentarily declined in popularity, do not necessarily fade away.
A brand is to be judged over a protracted term: a deficiency can always occur. Brand
support gives products a prospect to recover. If not, Jaguar of U.S.A would have moved
out long ago: no other brand could have withstood the negative effect of decreasing
quality of its cars during the 1970s. That is an excellent illustration of an advantage that
a brand brings to the company, besides the capitalisation and patent effects.
The brand contract is economic, not legal. Brands vary in this way from other
signs of excellence such as quality seals and certification. Quality seals officially and
lawfully testify that a given product meets a set of definite characteristics in
concurrence with public authorities, producers and customers so as to assure a higher
level of quality distinguishing it from similar products.
Brands do not legally testify that a product meets a set of distinctiveness.
However, through an unfailing and repetitive experience of these characteristics, a
brand becomes synonymous with the latter.
Branding Strategies of Indian Companies
An analysis of corporate strategies reveals six models in the management of
brand-product or service interactions. Each model denotes a certain role for the brand,
its status as well as its relationship with the products which the brand encompasses:
the product brand
the line brand
the range brand
the umbrella brand
the source brand
the endorsing brand
These six models allow us to structure the brand problem in all sectors: whether
it is a service, industry, consumer goods or luxury products. These branding strategies
facilitate product distinction or serve as indicators of product origin in varying degrees.
Fig 3.2
Source: Kapferer J.N, “Brand Architecture” , “Strategic Brand Management”pp -188-204
1. The product brand strategy
It is widely known that a brand is at the same time a symbol, a word, an object
and a concept. A symbol, since it has numerous facets and it incorporates figurative
symbols such as logos, emblems, colours, forms, packaging and design; a word,
Brand Function
Indicator of Origin
Corporate Umbrella Brand.
Corporate Endorsing brand.
Corporate Source Brand.
Umbrella Brand.
Endorsing Brand.
Source Brand.
Range Brand.
Line Brand.
Product Brand
Generic Brand
Brand Function:
Product Differentiation
Positioning alternative Branding strategies
because it is the brand name which serves as support for oral or written information on
the product; an object, because the brand distinguishes each of the products from the
other products or services, and finally, a concept in the sense that the brand, like any
other symbol, imparts its own significance- in other words, its meaning.
The product brand strategy involves the assignment of a particular name to one,
and only one, product as well as one select positioning. The result of such a strategy is
such that every novel product receives its own brand name that belongs only to it.
The company Procter & Gamble has adopted this approach as its brand
management philosophy. The company is represented in the soaps and detergent
market by the following brands, Ariel in the detergent segment, and by Camay, Zest etc
in the soap market. Each of these brands has a clear-cut, definite positioning and
occupies a particular section of the market: Camay is a seductive soap and Zest soap
for liveliness. Ariel projects itself as the finest detergent in the market.
A slender relationship between name, product and positioning has been
maintained over a period of time. To begin with, the only method to achieve brand
extension is by renewing the product. To keep the product at its summit and unique
positioning, the Ariel formula has often been enhanced since it was launched in 1969.
Ariel receives the best technical and chemical inputs from P & G (like its competitor,
Surf from HUL). Often, to emphasise a vital enhancement to the product, the company
adds an additional word after a brand name (Ariel, New Ariel, Ariel Ultra). To keep up
with the varying consumer behaviour, the brand name is applied to diverse formats, in
packaging: packets, drums, in powder or liquid forms. For example, Lux comes as a bar
soap and liquid soap.
The advantages of product brand strategy are many: for firms focusing on one
market, it is an offensive strategy to occupy the whole market. By indulging in the
practice of multiple brand entries in the same market (HUL has three cosmetic brands),
the company occupies many functional segments with different needs and expectations
and therefore has a greater consolidated share of the market. It becomes category
leader.
When the segments are closely related, choosing one name for product helps
customers to perceive better the difference between the various products. This may also
be necessary when the products resemble each other on the surface. Thus, it can be
seen that while all detergents are composed of the same basic ingredients, the
proportion of these may differ according to the factor that is being optimised: stain
removal properties, care for synthetic materials and promotions. In addition, retailers,
unwilling to take risks with untested products whose future is uncertain, stock them
only when tempted by heavy premiums
Fig 3.3
Source: Kapferer J.N, “Brand Architecture” , “Strategic Brand Management”pp -188-204
Product Brand strategy
Company X
Brand A
Product A
Positioning A
Brand B Brand N
Product B Product N N
Brand N Positioning B
2. The Line Brand Strategy.
This strategy can be made lucid `with an example. In 1986, Christian Dior, the
cosmetic company launched „Capture‟, an anti-ageing liposome complex for the skin.
Following its success, a first spin-off was launched in February, 1989, „Capture eye
shaper‟, followed by „lip shapers‟ and then additional products for the body. The
capture line was born. That these products are absolutely diverse for the producer
makes no difference to the consumer, who perceives them as related.
The line involves the exploitation of a successful concept by extending it but by
staying very close to the initial product. In other cases, the line is launched as a
complete ensemble, with many complementary products linked by a single central
concept. The eventual extension of the line will involve only the marginal costs linked
to retailers‟ discounts and to the packaging. It does not need advertising. It should be
compared to the marginal number of consumers that could be won.
The line brand strategy offers multiple advantages.
It reinforces the selling power of the brand and creates a brand image
It leads to the case of distribution for line extensions
It reduces launch costs
The disadvantages of the line strategy lie in the penchant to forget that a line
has limits. One should only include products innovations that are very strongly linked
to the existing ones. The inclusion of a dominant innovation could slow its
development.
3. The Range Brand Strategy.
Range brands bestow a single brand name and promote through a single
promise, a range of products belonging to the same area of competence. In range brand
architecture, products guard their common name. In the Lakme cosmetic range,
products are named „Lakme Peach Mild Moisturiser‟, Lakme Lipsticks, Lakme
foundation Creams, Lotions, Lakme compact Powder etc.
Range brand arrangement is found in the food sector, in cosmetics, textiles and
in industry. These brands combine all their products through a distinctive principle, a
brand concept.
The advantages and disadvantages of the structure are as follows.
It avoids the random spread of peripheral communications by focusing on a solo
name – the brand name – and thus creating brand capital for itself which can
even be shared by other products. Further more in such an arrangement the
brand communicates in a generic manner by developing its unique brand
concept. Another approach consists of communicating the brand concept by
focusing only on the most representative products through which the brand can
best convey its meaning and suggest consumer benefit. This can then be shared
by additional products of the range which are not directly mentioned.
The brand can easily dole out new products that can be consistent with its
mission and fall within the same class. Moreover, the cost of such new launches
is very low.
Among the problems that are most often encountered is one of brand opacity as
it expands. For instance the brand name „MDH‟ covers all savoury masalas (curry
mixes). It is a fine brand – high quality, modern, an expert in the masala manufacturing
and a generalist as well because it makes all kinds of home –made dishes. But there is a
demerit. Any brand can assert that it has the same recipe. To augment the brand and to
communicate its personality on one hand, and on the other hand to help the consumer
decide from the multitude of products that are on offer, the one product which
possesses all qualities being sought, an intermediate stage must be created between the
brand name and each actual product name. There should be definite colour lines such
as „Red‟ packets for Mirch Masalas and „Brown‟ packets for Curry Powders. These
throw light on the products and also help to configure the range in the same way as
shop keepers organise their shelves. The criteria for segmentation of families of
products depend on the brand.
The range structures the offer by putting together product which are
undoubtedly heterogeneous, but all of which have the same function.
Fig: 3.4
Source: Kapfere J.N, “Brand Architecture” , “Strategic Brand Management”pp -188-204
Range brand formation
Brand
Brand Concept
A B C D…... ……….N
4. Umbrella Brand Strategy.
Canon markets cameras, photo copying machines and office equipments all
under its individual name. Yamaha sells motor bikes, pianos and guitars. Palmolive is a
brand name for household products (dish washing liquid) and hygiene products (soaps
and shampoos for the whole family, also shaving cream for men). These are all
umbrella brands: The same brand supports numerous products in different markets.
Each of them has its own promotion tools and develops its own communications.
However, every product retains its individual generic name. Thus we speak of Canon
cameras, Canon fax machines, Canon printers.
The main advantage of the umbrella strategy is the capitalisation on one single
name and economies of scale on an international level. Not even one of their
undertakings, products or communications failed to add to Philips reputation. Even the
infrequent setback can add to public awareness of the brand. As a result, this allows
one to capitalise on the brand which is already renowned and reputed to enter markets
where the company is uncharted. The knowledge gives rise to nearly immediate
goodwill on the part of the distributor and the public concerned.
Firms enjoying such consciousness find the umbrella brand valuable in sectors
where modest marketing investment is required. In minor sectors, they can even thrive
with out any specific communications. It also allows sizeable savings when they enter
new strategic markets.
An umbrella strategy allows the core brand to be nurtured in union with
products with which it was not formerly associated. The umbrella brand imposes a
handful of constraints. Each division has its own infrastructure to increase its market
share and to emphasise the specific persona of its own brand. Toshiba hi-fi and low-fi
target the younger generations while the micro computer division aims its exceptional,
practical and portable computers at modern executives, and its television sets at
families. However in each of these markets, the general brand comes up beside a
multitude of specialist brands, forcing it to reveal the relevance of its products in each
of the segments where it wants to obtain a dominant position.
The problems encountered in umbrella brand management stem from laxity in
appreciating its demands. It occasionally happens that in wishing to save money by
diversifying under an umbrella brand, the firm forgets that the intension of the brand is
to gain money. Awareness alone is not sufficient in this respect. Every division must
use its financial and human resources to show that its products and services are as good
as those of specialist brands and even superior, something that is not usually evident.
The core of the brand is always stronger than its extensions.
Fig: 3.5
Source: Kapfere J.N, “Brand Architecture” , “Strategic Brand Management”pp -188-204
Umbrella Brand Strategy
Brand
A B C………………...N
A B C N
………………..
Product or service
Specific Communications
by product or service
5. Source Brand Strategy.
This is identical to the umbrella brand strategy except for one key point – the
products are now directly named. They are no longer called by one generic name like
Eau de toilette or Eau de parfum, but each has its own name example Musk, Poison,
Cold etc. This two tier brand structure is called double branding.
Since this strategy is often confused with the endorsing brand strategy it is
imperative to specify the difference from the start. When Nestle put its name on the
chocolate „Munch‟, „Milky bar‟, Kit-Kat and on Nescafe etc, the corporate brand is
endorsing the excellence of the merchandise and acts as a guarantor. The Nestle name
dispels ambiguity that certain products can create. Nestle adopts a back seat position.
The product itself is the champion to the extent that hardly any consumers of Munch
attribute it to Nestle. Within the source brand concept, the family spirit dominates even
if the progeny would have their own individual names. Within the endorsing brand,
however, the products are independent and have only the endorsing brand in common.
The advantage from the source brand strategy lies in its ability to offer a double
layered sense of difference and depth. It is difficult to personalise and offer a scheme to
a client without any individual expressions. The parent brand offers its worth and
individuality, customized and enriched by the daughter brand in order to draw a
specific customer segment.
The limits of the source brand are focused on the necessity to revere the core,
the spirit and the distinctiveness of the parent brand. This defines the strict precincts
not to be infringed as far as brand extension is concerned. Names that are linked to the
parent brand‟s sphere of action should only be associated with it. If greater autonomy is
sought, then the endorsing brand strategy is more useful.
Fig: 3.6
Source: Kapfere J.N, “Brand Architecture”, “Strategic Brand Management”pp -188-204
6. Endorsing Brand Strategy.
Car brands such as Ford, Chevrolet in the U.S and Opel in Europe are easily
recognised. Next to their logos and to the signs of the dealers of these brands we
always see two letters: GM. It is, obviously, General Motors. In the same way, Ariel –
the detergent powder is endorsed by famous brands like Whirlpool, LG etc. The
endorsing brand gives its approval to a wide diversity of products grouped under
product brands, line brands or range brands.
Parent Brand
Brand A Brand B Brand C Personal Brand name
Specific Communication Promise A Promise B
Promise C
Products Product A
Or line A
Product B
Or line B
Product C
Or line C
Source Brand or parent brand strategy
Fig: 3.7
It can be seen that the endorsing brand is positioned lower down because it acts
as a base guarantor. Besides what the consumers buy is Ariel. LG and Whirlpool
supports and assume a secondary position.
The brand endorsement can be pointed out in a graphic manner by inserting the
emblem of the endorser next to the brand name or in a diminutive way by simply
signing the endorser‟s name. It implies the use of an endorsing brand as a quality seal.
The manufacturer‟s distinctiveness remains and is endorsed by the quality seal of the
retailer that has chosen it.
The advantage of the endorsing brand is the larger freedom of movement that it
allows. Like the source brand, the endorsing brand also gains from specifically named
products. Each particular name suggests a dynamic image that has the power to evoke
among the consumers which in turn enriches and nurtures the endorsing brand.
Promise A Promise B Promise C Promise N
Product or
Range A
Product or
Range B
Product or
Range C
Product or
Range N
Brand A Brand B
Brand C
Brand N
Endorsing Brand
Endorsing brand strategy
The endorsing brand strategy is one of the least expensive ways of giving
substance to a company name and allowing it to achieve a minimal brand status.
Therefore, it can be seen that there is a splitting up of roles at each stage of the
branding ladder. The endorsing brand becomes accountable for the guarantee which is
indispensable for all brands and today, these guarantees not only cover areas such as
quality and technical expertise, but also civic responsibility and ecological concerns.
The other brand functions are assumed by the specifically named brands because if a
unique name would have sufficed as a guarantee, then it would have nullified the
functions of identifications, distinctions, personalisation and sometimes even that of
pleasure (Kapferer and Laurent, 1992).
The six branding strategies presented here are models adopted by Indian
companies. In reality, companies accept assorted configurations where the same brand
can be, according to the product, range, umbrella, and parent or endorsing brand.
Brand Extension-Definition
Barrison‟s Dictionary of Business Terms defines brand extension as “the
addition of a new product to an already established line of products under the same
name”. In other words, it means to build on the brand heritage. Brand Extensions can
be similar or dissimilar. Brand extension similarity to the core brand has been
conceptualised in numerous ways (Keller and Aaker 1992; C.W. Park et al .1991).
Aaker and Keller (1990) considered similarity in terms of whether the core and
extension products are substitute or complementary products, whether they have
common manufacturing processes, or whether they require the same expertise in
manufacturing. Others have considered similarity in terms of the number of product
features shared between the core brand and the extension (Keller and Aaker 1992).
Academic researchers (Dawar 1996) and marketing practitioners have recognised that
marketers are often motivated to either extend brands to seemingly dissimilar
categories, (c.f.Keller 1993), or to introduce extensions that have attributes that are
inconsistent with the image of the core brand.
Brand Extensions and Emerging Markets.
Brand extensions were supposed to improve product life cycles thus ensuring
customer allegiance and market share. In the past, repackaging the same product and
branding it as “New Improved”, used to be conceded as brand extension. But with
growing consumer consciousness of the product ingredients, and government
regulations on false advertising, such tactics were dumped. With perceivable
differences sandwiched between the old and new product, the consumer “loyalty” for a
specific brand is guaranteed. This was particularly so with consumers having growing
disposal incomes and who could afford higher prices for the same generic product.
There must be obvious differentiation in the product. Brand extensions are used
normally for established products in mass markets, like toothpastes and soaps, where
the barriers to entry into the market are very low. New entrants can attain market
penetration by merely introducing the product into the market. Loss of a few
percentage points in market share can spell catastrophe to some of these established
products. Brand extensions can be used to inundate the market with products suited to
every segment, thus ensuring market saturation. Another strategy in use is to saturate
the shelf space in super – markets by similar products (brand extension) of the same
company. For example, P&G, the consumer product giant of U.S.A uses this strategy to
perfection. Extensive research has been done in developed countries like U.S.A, on
brand extensions and their effects on market shares and profitability. As far as the
company is concerned, very little outlay is needed by way of capital, equipment and
developing distribution channels. For the patrons, it gives the assurance and satisfaction
that they are getting a product with known quality enhanced in some mysterious way,
irrespective of whether such an up gradation has actually been effected or not.
Brand extensions are vital to developing markets like India, for numerous
reasons. Amongst them are the open market policies adopted by the government in
agreements sponsored by the WTO , the growing consumerism amid the younger
generation with huge disposable incomes , ever expanding markets with women
making decisions on choice of products with their new purchasing power , and to enter
into new consumer niches with sharply different and continually changing tastes and
incomes.
Brand Identity
McClendon (2003) considers that brand identity is something that exists in the
minds and hearts of the consumers when they hear the name of the brand. He further
adds that it is the identity of the brand which provides the real strength to the
business. Brand identity represents the icon of a product, line or service. It is the
prime link between the company and the consumer. The brand identity consists of the
brand names, the insignia, its positioning, associations and above all its personality.
Upshaw (1995) has identified the brand identity as a brand‟s DNA configuration. He
supposes that the particular set of brand elements is blended in a unique way to
establish how the brand will be perceived in the market place. Kapferer (2001)
observes that it is imperative for every business to understand that brand attributes are
crucial elements for a company to thrive. To identify what are the important elements
required for extensions, a close observation of the consumers through interviews shall
give productive results to the branding company. According to Aaker (2000), a brand
is more than a product. Extension creation not only helps the mother brand to come
out of its nutshell but also rejuvenates and revitalizes its entire self. Aaker says that
there are plenty of reasons to build a rich brand identity which is demonstrated in the
figure below.
Fig: 3.8
A Brand is more than a product
Source: Aaker , 2000
Brand
Brand Personality
Organisation Symbols
Brand/Customer
Product Relationship
Self expressive
benefits
Country of
Origin
User Imagery Emotional Benefits
Scope
Attributes
Uses
Quality
Functional
benefits
“A richer brand identity is a more accurate reflection of the brand. Just as a person
cannot be described in one or two words, neither can a brand. Threeword taglines or
an identity limited to attributes will simply not be accurate” (Aaker, 2000, p. 54).
Aaker says that brand identity symbolizes what the brand actually is. The brand
identity reflects the culture, values and vision of the entire organization. The need of
the consumer helps in designing the branding strategy. Moreover, Aaker highlights in
his figure that “the extended identity provides a home for constructs that help the brand
move beyond attributes. In particular, brand personality and symbols normally fail to
make the cut when a terse brand position is developed, yet both are often extremely
helpful strategically as well as tactically” (Aaker, 2000, p.54).
Family Tree depicting Brand Hierarchy
All brands have a family tree which illustrates its structure. The family tree
includes all the product categories along with its sub-brand branches. The figure
illustrated below depicts a brand hierarchy tree which looks very similar to an
organizational chart. The horizontal and vertical elements signify various factors such
as the products, design, quality and segment (Aaker, 2000). The vertical facets stand
for the various sub-brands that come under a particular product category whereas the
horizontal dimensions signify the scope of the brand with regard to the various
product categories that come under the family brand, Colgate. (Aaker, 2000)
Fig 3.9
Brand Hierarchy Tree for Colgate Oral Care Products
Source: Aaker, 2000
The visual sketch of the brand helps the brand managers to keep a close eye on
the brand and analyse if there are too many or too few. The entire idea behind this
hierarchy is how can the brand be made tougher and stronger, how effectively the
brand message may be delivered to the consumer and how can the brand be improved.
(Aaker, 2000).
In this connection, it is important to note that the brand hierarchy is a vital
ingredient of a brand and the study intends to examine the relationship between the
product categories in the brand hierarchy and the effects the mother brand has on its
extensions and vice versa to find out if there is any correlation between them.
Colgate
Toothpaste Toothbrush Dental
Floss
Mouth
rinse
Fluoride
tablets
Plus Precision Classic Youth Colour
change
Fit Perception
Parent-product extension similarity is the degree of consumer‟s perception of
the extent of similarity between the parent brand and its extensions. It is a widely
accepted notion that the success of brand extensions depend upon the level of
perceived similarity between the mother brand and its extensions. Similarity would be
with respect to the characteristics of the product category, that is the physical
personality or the benefits that it gives to the consumers of the parent brand. This
would always enhance the success of brand extensions by creating positive attitudes
towards the extensions. This is based on the assumption that consumers will develop
more favourable attitudes towards the extension, if they perceive high resemblance
between the extension and the original. Familiarity with the core brand is also another
determining factor of success of its extensions. Brand familiarity/awareness may be in
terms of capacity to recall which depends on usage, appearance, package and so on.
Researchers have identified two dimensions of the fit construct (Park, Milberg
&Lawson 1991; Bhat &Reddy, 2001). The first dimension is the product level fit
which indicates the extent of perceived similarity between the product categories of
the parent brand and its extensions. The second is the brand level fit which refers to
the congruence between the image of the brand and its extensions. The brand “Fair &
Lovely” cream marketed by Hindustan Unilever Limited has been positioned as a
beauty product in the Indian market. It has been extended to a number of product
categories under the personal care segment like toilet soap, talcum powder, lotions
and so on. The results in terms of sales are positive for all its extensions. This is
because the extensions have been positioned along the lines of cosmetic value or
beauty benefits. The core value of “beauty and fairness” has been leveraged
effectively. Another example is the case of Tata. Tata is known for its values, ethical
practices and high image by providing good quality products. This has helped
enhance the brand extension success in ventured products. Yet another example is that
of Park Avenue, a prestige brand which extended to almost all men‟s accessories
which again highlights the similarity fit concept.
From the above examples, one can conclude that with increasing fit between
the core brand and the brand extension product, the probability of success of the brand
extension will increase with the formation of favourable attitudes towards the
extension. Also, it is considered important for the study to include the perception of fit
as a variable which will help in analyzing the factors which decide the success of
brand extensions and their core brands and the effects brand extensions will have on
their core brands.
Brand Attributes – Product and non-product related
The category to which the brand is extended should be unique in the sense that
it should add on to the already existing image of the parent brand. The brand should
contain within itself a number of product related and non-product related attributes.
Product related attributes are ingredients necessary for performing the product or
service function sought by the consumers. It implies the physical composition of the
brand. Non-product related attributes refer to the external aspects of the product or
service that relate to its purchase or consumption. These attributes include elements
like pricing, packing, user imagery and usage imagery.
User imagery is the perception of the consumer as to who the typical user of
the product is. Usage imagery helps to explain the reason why a brand appeals to
some markets but not in others. This analysis will prove very useful to marketers to
find out which markets are good for them and how to restructure their brands to
appeal those markets where their brands do not fare well. If the brand and its
extension fail to comply with the needs of the consumers, it is bound to fail miserably.
Extensions that do not add anything new or better to attract consumers hardly
create an impact on the core brand. For instance, Colgate &Palmolive believes that
the name Colgate (enjoying dominance in the top 100 FMCG brands of Brand Equity
Economic Times listing of 2007) represents exclusiveness and consistent high quality.
The extensions of Colgate like toothbrushes, toothpowders which are categories apart
are linked by common values and are unique in them. It is thus clear that the brand
extension should not hurt the essential position of its core brand. Thus, the brand
attributes form an important part of the study without which the study would be
incomplete.
Brand Image
The characteristics of parent brands play an important role in shaping the
attitude towards its extensions. The characteristics of the parent brand include brand
strength, uniqueness of its knowledge structure in the consumer mind (cognitive
dimension) and the characteristics of product category to which the core brand is
extended. The basic principle behind the employment of brand extensions is that
bigger and stronger brands provide greater impetus for extensions than smaller
brands. Therefore, brands which have a bigger market share provide a solid
foundation for the growth and success of its extensions.
Keller (1993) defines brand image as the “perceptions about a brand as
reflected by the brand associations held in consumer memory”. These associations
refer to any aspect that link the brand with the consumer‟s memory (Aaker 1996).
Thus, the uniqueness in the knowledge structure of the core brand in the consumer‟s
mind helps in creating a strong and stable relationship between the parent brand and
its extensions.
The notable features of the product category to which the core brand is
extended also influences the attitude formed towards its extension to a large extent.
This is very true in the Indian context where Pond‟s is known for its positioning as a
beauty product has been extended to other product categories such as Pond‟s cold
cream, Pond‟s body lotion, moisturizer, deodorant , face wash by effectively utilizing
its brand equity. All these extensions have a baseline – it is a product culminating
softness and radiance. This explains why its toothpaste was a failure in the Indian
market. Every company is striving to survive in this turbulent market and is finding
ways and means to capture the consumer mind space. This can be effectively done
only if steps are taken to boost its image and strength. Hence, brand image is a crucial
variable in the study without which the findings would be deficient.
Perception of Quality
Brands enjoying greater perception of quality shall bestow higher risk relief to
consumers than brands having lower standing. This notion has been true to all kinds
of product categories like FMCGs, durable goods and particularly for services.
Quality of the core brand paves the way for the brand and is assured of more equity in
the minds of the consumers. Once the core brand enjoys high quality, then it always
has the opportunity to extend.
When a brand enjoys high perceived quality and reputation, the consumer
attitude towards the brand shall be undoubtedly positive. Perceived quality will
always have a direct bearing on the purchase decisions and the brand loyalty
especially in cases where a buyer is not motivated or able to conduct a detailed
analysis on the pros and cons of the brand. For instance, Dettol of Reckitt and
Benckiser India Ltd represents a highly trusted, hygienic household and personal care
product. That is the quintessence of the brand is its apparent value. Dettol has been
extended into toilet soap, liquid soap, shaving cream and other household items have
thus been successful. Dettol has thus, created an image in the consumer minds which
is difficult to change. Extending Dettol to something different like, for instance, a
beauty cream or toothpaste would be entirely out of its personality. Therefore,
information extended by the parent brand is also equally important in forming an
attitude towards its extension and thus has to be undoubtedly a part of the research.
Brand Associations
Associations of a brand are informational links of the attributes, benefits and
attitudes about the brand in the memory of a consumer and it reveals the meaning of
the brand to the consumer. The favourabilty, power and exclusiveness are the
elements distinguishing brand knowledge that has a vital role in determining the
success of the brand and thus enhance its equity. The experience with the parent brand
can be explained by the reputation of the brand, its credibility, awareness of the brand
and the degree of confidence developed by the consumers in using the brand.
Reputation of a brand is the image enjoyed by it as a result of consumer
perceptions of quality revolving around the brand. The chances of success of brands
having higher perceived quality are more than brands having lesser perceived quality.
This can be made clear by quoting an example from Johnson & Johnson (J&J). They
are known to be the masters of brand extensions when it comes to baby care products.
Their corporate brand name has supported each of their extensions from baby powder
to baby soap, shampoo, oil, lotions, creams, tissues and so on. The experience with
the core brand image , that is , “baby care products” create a feeling of confidence in
the consumer minds that their babies are safe and are well taken care of by J&J. This
makes the brand credible making it trustworthy, dependable thus enhancing customer
loyalty.
A strong feeling of awareness is thus created among consumers that no other
brand is as good as the one they are using. For instance, When Glaxo which is a
trusted brand by mothers for baby foods decided to extend itself to talcum powder for
babies, it did not work. Thus, it was understood that it would require more than a
superficial brand extension to dislodge J&J. As awareness of a brand increases, so
does the understanding of its benefits increases. Brand benefits may be functional,
experiential or symbolic in nature. The functional benefits are benefits derived from
the use of the particular brand or more clearly, the physiological benefits obtained as a
result of using the brand.
Experiential benefits are based on what it feels to use the product and the
symbolic benefits correspond to the approval from the society in using the product or
service. Consumer usage and evaluations of the brand leads to the formation of
attitudes. Here, the consumer assesses whether the brand extension has a perfect fit
with its core brand with respect to its attributes, personality, image, benefits and so
on. Any study without taking into consideration the brand associations would be
partial. Accordingly, the associations of the brand form another variable of the
research.
Brand Personality
There is a proliferation of brands in the Indian market today. Brands of
varying shapes, sizes, texture and many other distinctive features are available based
on our choice, tastes and traditions. This varying demand is evident in any brand from
the car we drive to the food we take. These brands evoke interests in the consumers
on the basis of the personalities they hold. Thus, every brand has its own distinct
personality that appears to us in a different way in different situations. According to
Hawkins et al (2001), each consumer will purchase the respective product with the
personalities that match the most of his/her personalities. As a formal definition of
brand personality, Aaker (1997, p.20) believes that brand personality is "the set of
human characteristics associated with a brand," Larson (2002) considers brand
personality as the first reaction people tend to have towards a brand when they hear,
see, taste or touch a certain product belonging to a specific brand name.
Aaker has given a detailed description on how brand personality can create
market differentiation. “First, a personality can make the brand interesting and
memorable.” He adds that “a brand without personality has trouble gaining
awareness and developing a relationship with customers. Second, brand personality
stimulates consideration of constructs such as energy and youthfulness, which can be
useful to many brands. Third, a brand personality can help suggest brand-customer
relationships such as friend, party companion or advisor.” He concludes that “with
the personality metaphor in place, relationship development becomes clearer and
more motivating.” Aaker (1997, p352).
Fig: 3.10
Dimensions of Brand Personality
Source: Aaker (1997)
Brand Personality
Sincerity Excitement Competence Sophistication Ruggedness
Down to
Earth
Honest
Wholesome
Cheerful
Daring
Spirited
Imaginative
Up to Date
Reliable
Intelligent
Successful
Upper
Class
Charming
Outdoorsy
Tough
Hawkins et al. (2001) say that consumers see brand personalities in five
dimensions. They are sincerity, excitement, competence, sophistication and
ruggedness, each one consisting of several categories. For instance, the sincerity
aspect speaks about how dedicated the brand is to the consumer and the consumers
may also think about how down-to earth, wholesome and cheerful the brand might be.
The excitement dimension is the extent to which the brand spurs thrills and
exhilarates the consumers. In other words, it shows how much the brand is daring,
energetic, creative and sophisticated.
Hawkins et al. (2001) also contend that a brand builds up its personality during
the term of its life cycle. These personalities or characteristics help the brand build
itself up and eventually increases its market share. That is the reason why he believes
that personality is a crucial factor to assure the marketers of the success of a brand.
Plummer (2000) says that brand personality has two different sides which are
equally important. One side is called the input and stands for what the brand managers
want their consumers to perceive about their brand and the other side stands for what
the consumers are thinking and feeling about the brand. Plummer also says that these
two sides of brand personality may be called the brand personality statement and
brand personality profile.
The brand personality statement personifies the needs and aspirations that the
company‟s products shall represent for the prospective buyers whereas the brand
personality profile is a device which is used to analyse the consumer perception
towards the brand. The profile indicates which facets of the brand are strong and
weak. This is usually done through consumer surveys.
Melin (1997) illustrates brand personality in the form of a diagram where the
brand personality is plotted in the exact position to where it belongs. Melin‟s methods
reveal where the particular brands are perceived among the various dimensions.
Fig: 3.11
Brand Personality Visualized by a Graphic Form
Source: Melin (1997)
Thus, the personality of brand is a decisive factor in the success of a company
and the company makes stupendous efforts to commune their ideas of brands to their
target consumers. The greater the assortment of brands extended, the higher the
knowledge the company needs regarding how their consumers be acquainted with the
extended brands. Thus, it is considered important in the study to include brand
personality as a variable which will help in analyzing the factors which decide the
success of brand extensions and their core brands and the effects brand extensions
will have on their core brands.
Inter relationships among Different dimensions
The success of a brand extension is to a large extent determined by how
customers evaluate the extension (Klink and Smith 2001). In order to improve the
success rates of the parent brands and extensions, it is important to measure the
significance and relative importance of factors affecting retailer and consumer
evaluations of parent brand and its extensions. It is also important to understand how
the various factors affect each other and whether the variables reinforce and
complement each other. Therefore, it is imperative to study the interrelationships
among the various dimensions of brands.
In this study, the relationship between the concept of awareness and attitudes
are investigated into. The interaction between awareness levels and usage/intention to
stock the brands and extensions is evaluated. The success of a parent brand and its
extensions largely depends on the attitudes that the retailers and consumers hold
towards them. It is thus necessary to find out whether positive attitudes towards the
brands lead to an increase in the usage level of the same. High quality is obviously a
determinant for success. It is thus attempted to study whether high quality of the
brand leads to increased satisfaction levels of the parent brand and its extensions.
Consumer Behaviour and Consumer Perception Theories
Consumers take decisions to purchase according to their own perceptions.
They are the masters to decide as to what they require from a brand and choose the
brand they need. The companies generally study the trends and tastes of the
consumers and decides on those strategies which appeal to majority of the consumers.
This in turn gives a competitive edge to the brands.
The nature of Consumer behaviour
According to Antonides et al. (1998), consumer behavior is complex and
includes different perspectives. In this respect, it is necessary to provide their
definition of the concept.
“Consumer behavior concerns mental and physical acts including their
motives and causes of individuals and groups regarding orientation, purchase, use,
maintenance and disposal and household production of goods and services from the
market sector, the public sector, and the household sector, leading to functionality
and the achievement of consumer goals and values and thus to satisfaction and well-
being taking into account short-term and long-term effects and individual and societal
consequences” (Antonides et al. 1998, p.4).
The above definition tells us that consumer behaviour both physical and
mental actions whereby the former is of a concrete nature, like the purchase of an item
whereas the mental actions is of a voluntary or involuntary nature which is impossible
to observe. Some mental acts may be the result of a conscious decision like the
purchase of an expensive product whereas some others may be the end result of a
spontaneous decision. For instance, the act of buying ice-cream on a hot day. Also,
consumption might take place as a result of the influence by a group. The nature of
consumer behaviour can be made clear from the model of Hawkins et al. (2001) given
below.
The figure given above gives the descriptive detail about the nature of
consumer behaviour. According to Hawkins, consumers develop self-concepts and
lifestyles based on extrinsic and intrinsic control. They have a number of needs and
desires which arises from the self-concepts and lifestyles which ultimately has to be
satisfied. For this, a number of consumption decisions needs to be taken. The process
of consumer decision, together with the experiences and acquisitions derived from it,
affect the consumer‟s self-concept and lifestyle by affecting their external and internal
characteristics. Each individual has a view of their own self concept and each one
tries to live in a certain way according to the affordable resources lifestyle.
The way someone chooses to live is determined by different internal factors
such as personality, values, emotions and memory as well as different external factors
such as culture, age, friends, family and subculture. In order to attain the desired way
of living, certain needs and wants appear. The majority of these situations result in
purchase decisions. The decision process will determine learning and may influence
certain internal and external factors, which in turn will affect the self-concept and
lifestyle (Hawkins et al. 2001).
The Nature of Perception
The concept of perception is a decisive psychosomatic process and is highly
relevant in the study as it helps to understand how consumers perceive new products
created through brand extension.
“Information processing is a series of activities by which stimuli are
perceived, transformed into information and stored” (Hawkins et al., 2001, p.284).
Below is a figure which demonstrates the information – processing model with
the stages as follows:-
1. Exposure
2. Attention
3. Interpretation
4. Memory
The first three elements form perception. According to Antonides et al. (1998),
consumers perceive reality in their own ways. Among them, subjective and objective
perceptions stand out. Subjective perception is selective. However, this selectivity is
essential nowadays to the overload of information. From the amount of offers on the
market, people have to take this decision, which on the other hand can make them
miss relevant information (Antonides et al. 1998).
Positioning of brand by the consumer determines the future of the brand.
When a new Product is launched in the market; the consumers determine the category
into which the brand fits in. The consumer does this by taking notice of the brand
characteristics and its personality. Perception gives a whole new meaning and a place
to the new product (Antonides et al. 1998). By taking a look at the information
processing model for consumer decision making of Hawkins et al. (2001), the nature
of perception and how it works can be made clearer.
Exposure takes place when the person comes in contact with a stimulus, for
instance a sign board within the limit of the person‟s sensory perceptors i.e. vision.
Attention occurs when the sensory perceptors pass the vibrations to the brain for
processing. Memory is the retention of information processed in the brain. It is
retained for further decision making or long- term retention of the meaning (Hawkins
et al. 2001)
The figure outlines a linear flow from exposure to memory. Many a times, all
the processes occur concomitantly and interact with each other. A person is exposed
to a substantial amount of information. Of the massive information available, the
person is exposed to a certain amount of it and a relatively small percentage is
attended to and moved on to the central processing part of the brain for the purpose of
interpreting it. Most of the interpreted information need not necessarily be available to
the active memory when the individual makes the purchase decision (Hawkins et
al.2001). Thus, individuals are not inactive recipients of messages and information in
the market. To be more precise, consumers see and accept the messages passed on to
them. They also assign meanings to the messages. Obviously, the marketing and the
brand managers of firms faces an exigent task while communicating with consumers.
The Contemporary Indian Consumer – A Silhouette
Caveat Emptor – Let the buyer beware! This was what ruled the Indian market
for decades. The Indian consumer market today has undergone a revolutionary change
that is from a pyramid to a sparkling diamond. India previously was not in line with the
other developed countries with regard to business and other worldly matters. But, now
India‟s rising to an economic power has compelled the world to unravel the mystery
called “India”.
India is a country with diverse regions, culture, languages and religions which
makes it an intriguing element for any marketer to determine the right proposition of
entry into the prospective market. The MNCs view India as one of the key markets
where their future lie. A study by McKinsey Global Institute (MGI) shows that if India
grows at the current pace, the average household incomes will triple over the next two
decades and it will become one of the largest consumer economies by 2025. It occupies
the 12th
position now and will jump to the 5th
by 2025. The Indian market was designed
as a pyramid; a small percentage of high end class of consumers known as the affluent
class at the top, the middle class consumers at the centre and the lower class
consumers who are economically disadvantaged at the lower level. This structure has
changed to the diamond which represents increasing volume, value and changing
attitudes across all classes of consumers in the Indian market. Thus, the Indian
consumption patterns are slowly synchronizing with the global norms. They are
spending more on consumer durables, entertainment, clothing and so on which is
witnessed by a stupendous rise in consumer spending in 2003.
The Indian Consumer spending basket:
Consumer Durables – 53%
Books and Music- 32%
Movies and Theatre- 38%
Vacation- 32%
Home Textiles- 29%
Mobile phones- 96%
Payment household help- 48%
Computer/peripherals- 10%
Consumer spending (2006)
Total consumer spend – Rs.20,00,000 cr
Retail: Rs.12,00,000 cr
Organised retail: Rs.55,000 cr
Leading retailers‟ sales growth : 50-100% in 2005-„06
Source: KPMG/Research, 2007
Table 3.1 showcases the spending habits of people in the urban areas and rural
areas.
Data were collected by a research study conducted by KPMG research
organization in the year 2007. The category wise spending in the rural and urban areas
has been given in percentages.
Table: 3.1
Urban –rural divide in spending (%)
Category Rural Urban
Entertainment 33 67
Consumer Services 44 56
Durables 50 50
Misc.Consumer goods 57 43
Clothing and footwear 61 39
Food 64 36
Source: KPMG/Research,2007
According to KSA Technopak, 300 million odd middle class – the real
consumers – is catching the attention of the world with over 600 million effective
consumers by 2010. Thus, it is without doubt that India will emerge as one of the
largest consumer markets of the world by 2011.
Deciphering the Indian consumer
The Indian consumer is attracting global attention not only because of its
increase in volume but also because of the colossal rise in demand among the middle
class consumers. Increasing urbanization, high levels of incomes and aspirations for a
standardized living are other reasons. The result of this volatility brings out a new
Indian who is more astute than ever, who gives utmost importance to quality, brand and
eagerness to explore the mysteries of the retail market. The characteristics of the new
Indian consumer may be described as follows:
1. Aspiring for a better life
As a result of increase in incomes and the movement of the economically
disadvantaged households into the lower strata of the middle class, the average Indian
consumer is able to afford a more urbanized lifestyle.
2. Choosiness in buying products
With increased income, the consumers have become more aware about brands
and choosier with their purchases. The USPs of the companies should be their product,
positioning and packing innovation. For instance, the modern consumers are more
health conscious and are selective about buying food brands having a quality value and
health value. Introducing oat meal breakfast is a good example. Indianising pizza
brands is yet another good example to portray the importance of the Indian market in
the global scenario.
3. The brand conscious Indian consumer
The Indians have become predominantly brand conscious and sophisticated. A
typical consumer has begun to choose products based on the brand name and the
reputation that it enjoys in the market. The modern consumer looks for brands that suit
their lifestyles which mean that they look beyond the utility aspect of the brand. An AC
Nielsen survey has ranked India as the third most brand conscious country in the world
after Greece and Hong Kong. It was reported that 35% of the Indian respondents spend
money on luxury branded goods.
Thus, the Indian consumer market is a bowl of transmutation. The changing
customer needs, tastes and aspirations have forced the companies to re-look at their
product positioning and market segmentation. The dominance of the young generation
and the synchronization of their demands with the global lifestyle will certainly boost
up the Indian market growth. One important fact that needs to be understood by the
consumer companies is that inspite of the changing tastes and fashions, the culture and
traditions that back them up is the same. Therefore, all companies have to realize the
stark reality that India is a hard nut to crack but they cannot do without it.
FMCG Brands – The Magic Pot of the Indian Consumer Market
Over the last two or three decades, the concept of brands and branding had
developed to a great extent that in the fifties and sixties, if a typical consumer was
asked to give some examples of brands they would reply with names of household
products like Colgate toothpaste, Forhan‟s toothpaste or Farex baby food. Presently, if
a similar question is posed to them, they would answer with names of companies like
Procter & Gamble, Wipro etc. According to Larry Light, the editor of the Journal of
Advertising Research “The marketing battle will be a battle of brands, a competition
for brand dominance.
Consumer goods branding was considered to be the model for all branding; it
was where the belief in the brand was born and truly developed. Brands are
multifaceted animals that live in their own bionetwork of economic, social and
competitive realities. The most important reality is the one that it shares with their
consumers. Fast moving consumer goods (FMCG) companies, like Procter & Gamble,
Hindustan Unilever Limited and Godrej developed their own well researched models of
brand development and monitoring to capture consumer mind space. Even though these
companies still safeguard and promote their brands passionately and continue to invest
in research and development to bring new brands on to the market, many of their
launches result in huge losses. Therefore, the question that remains in the minds of the
marketers is how many brands to retain in the market as too many brands in their
portfolios have spelt complexities in their operations and performance. Despite this
fact, there are various companies which efficiently carry forward its operations and
keep on launching new brands thus rejuvenating their brand image thus creating a
unique brand identity.
The Economic Times‟ Brand Equity publishes the list of India‟s Most Trusted
100 brands every year. The brands are selected on the basis of brand value and top of
the mind recall among consumers. The table below shows the top 50 trustworthy
FMCG brands for the year 2008.
Table No: 3.2
Top 50 trustworthy FMCG brands for the year 2008
Serial
No Name of the Brand
1. Colgate
2 Lux
3. Lifebuoy
4. Dettol
5. Horlicks
6. Tata Salt
7. Pepsodent
8. Britannia
9. Close-Up
10. Glucon D
11. Clinic Plus
12. Pond‟s
13. Fair & Lovely
14. Good Knight
15. Parle Products
16. Bisleri
17. Tata Tea
18. Vicks
19. Pepsi
20. Ariel
21. Dabur
22. Frooti
23. Mirinda
24. Coca-Cola
25. Bournvita
26. Maggi
27. Thums Up
28. Surf
29. Rin
30. Maaza
31. Amul
32. Johnson & Johnson
33. Head & Shoulders
34. Complan
35. Sunsilk
36. Fevicol
37. Iodex
38. All Out
39. Limca
40. Cadbury
41. Fanta
42. Rasna
43. Zandu Balm
44. Dabur Amla Hair Oil
45. Cinthol
46. Moov
47. 7 Up
48. Hajmola
49. Amruthanjan Balm
50. Tide
Source: Economic Times Brand Equity‟s Top 100 Most
Trusted FMCG Brands 2008
Oral care brand Colgate tops the list of the Most Trusted FMCG brands 2008.
Colgate had remained the highly trusted FMCG for 2007 also. Hindustan Unilever
Limited (HUL) continues to lead the top 10 table. It is evident from the table that
brands live with consumers. They exist in the minds of the people and the HUL brands
have enjoyed the trust and confidence of its consumers. It is also observed that many
brands have lost their positions in the detergent segment such as Tide and Henko.
Many brands such as Everyday Milk powder which were popular do not feature in the
list at all. It should also be noted that almost all the brands are owned by MNCs. The
second position is occupied by Lux of HUL ; Lifebuoy at the third place also owned by
HUL; Dettol of Reckitt Benckiser in the fourth position and Horlicks of SB Healthcare
Ltd in the fifth place.
CONCLUSION
This chapter presented the conceptual framework for the research. It gave an
insight into the various dimensions of brands, the branding strategies of Indian
companies, the spending habits of Indian consumers and the various FMCG brands in
the country.
It is, thus, imperative to say that India is moving from a penetration drive
economy to a utilization driven one. The competition among brands is escalating and
newer and more innovative methods are required by marketers to keep up with the
competitor‟s heat. In the new millennium, the consumer will try to abridge complexity
by dropping into routine behaviour. Thus, new products will require a tough new
reason to exist. This is, indeed, a problem that branding companies have to deliberate
about. While brands can use every bit of excitement they can produce, their eventual
destiny depends on the value proposition and emotional connect they can achieve with
consumers.
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