CHAPTER – THREE

BRANDS AND THEIR MAJOR

DIMENSIONS – A CONCEPTUAL

FRAMEWORK

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.

Fig: 3.12

Overall Model of Consumer Behavior

Source: Hawkins et al., 2001

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.

Fig: 3.13

Information Processing for Consumer Decision Making

Source: Hawkins et al., 2001, p.284

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.

REFERENCES

Aaker , David A and Kevin Lane Keller , (1990) “Consumer Evaluations of

Brand Extensions” Journal of Marketing, 54(January) :27-41

Dawar , Niraj (1996) ,”Extensions of Broad Brands : The Role of Retrieval in

Evaluations of Fit “, Journal of Consumer Psychology 5(2):189- 207

Melin, B (1990), “Comment Evaluer les marques” Research Paper, under the

direction of Kapferer, J.N, HEC, June, Juoy-en- Josas.

Montameni, R. and Shahrokhi, M.(1998) , “Brand Equity Valuation: A Global

perspective”, Journal of Product and Brand Management, Vol.6 No.1 pp.64-

77.

Kapferer J.N (1996), “The New Rules of Brand Management, Strategic Brand

Management” The Free Press, New York, 10020 pp-46-58.

Kapferer J.N (1996), “Brand Architecture”, “Strategic Brand Management”

The Free Press, New York, 10020 pp -188-204.

Kapferer, J N and Laurent, G (1992) La Sensibilite aux Marques, Editions„d‟

Organisation, Paris.

Keller and Aaker (1992), “The Effects of Sequential Introductions of Brand

Extensions “, Journal of Marketing 57(January): pp 1-22.

Keller, Kevin Lane, (1993),”Conceptualising, Measuring and Managing

Customer- Based Brand Equity”, Journal of Marketing 57(January):pp 1-22.

Keller , K. (2002).Strategic Brand Management 2nd

edn.New Jersey , USA:

Pearson Education , Inc

KPMG Research Report (20070 , India’s Income Classes pp-2-4

The Economic Times, Brand Equity, September 27 , 2008 pp 3