Double triumph

The Nano and IPL come on top, Swift Dzire springs a surprise in the 13th annual Brand Derby

The Nano and Indian Premier League, both game-changers in their market, are in a dead heat in the Brand Derby to decide the best brand launches of 2008. Eighty-seven per cent respondents, senior marketers in top metros, rated IPL as very successful, as against 76 per cent for the Nano. But when asked to rank the very successful brand launches, 27 per cent put their faith on the Nano and 24 per cent on IPL.

The two are perhaps the most powerful brands ever to have emanated from India. (The Taj Mahal would be bigger but its makers were evidently unaware of the tools with which to build brands.) While IPL has taken the cricket world by storm (countries fell over each other to host the second edition of the tournament in April 2009), the Nano has elevated frugal engineering to newer heights. Even Japanese small-car maestros like Suzuki have said they can’t build a rival to the Nano. It has, since its launch, become a generic expression for something that is cheap but not short on features, not stripped-down but value-engineered.

And it is easy to see why it is on top amongst the very successful brand launches of 2008, though more people felt IPL was more “very successful”: The car is yet to taste commercial success, while IPL has completed two extremely successful and profitable editions. The commercial success of IPL is proven — a task Tata Motors will have to accomplish in the next few quarters.

Golden debuts
But when it comes to sheer achievement, Nano is head and shoulders above others. The disbelief when Ratan Tata drove the car to the podium at the Auto Expo in New Delhi on January 10, 2008 only added to its mystic. Till the last moment, rivals weren’t sure if Tata would be able to deliver on his promise of a car for just Rs 1 lakh. “It was a leap of faith, as big as Pokharan,” says a band expert, referring to the nuclear explosions carried out by India at this remote village in the deserts of Rajasthan in 1974.

In the months after the launch, the Nano got embroiled in a massive controversy. Opposition parties said farmers were shortchanged by the West Bengal government when land was bought from them for the Nano factory at Singur near Kolkata. After much sabre-rattling, Tata Motors moved the plant to Sanand in Gujarat. But that did not take the sheen off the brand. When it was time to open bookings, Tata Motors had to spend little on conventional advertising — the car had been so much talked about.

IPL, on the other hand, was an experiment with a new format of a sport that sells like nothing else in India. It promised the best of many worlds: Slam-bang cricket from the subcontinent, the league format from Europe and the look and feel of baseball matches in the US, complete with dugouts and cheer girls. And it delivered on the promise.

It was a great marriage of entertainment and sport. All of a sudden, viewers were back in cricket stadiums. Like Keynes gave mainstream economics its life-breath back after the Great Depression, IPL showed that there was a lot more that can be extracted from cricket.

On the third spot after the two powerhouses is Swift Dzire, the sedan from Derby regular Maruti Suzuki. Sixty per cent of the respondents thought it was very successful and 16 per cent ranked it on top amongst the very successful launches of 2008. The car, which replaced the old warhorse Esteem, may be under-advertised, but the queue of customers is long — the wait for a Swift Dzire can be as long as four months. The country’s largest car maker’s other launch of the year, the A-star, hasn’t done so well. Only 14 per cent felt it was very successful. In the ranking sweepstakes, it is 15th amongst 16 brands. Suzuki, the Japanese parent of Maruti Suzuki, is best known in the automobile world for its small cars and not sedans.

The study for the annual Brand Derby was carried out by Ipsos Indica Research, the Indian arm of global market research specialist Ipsos, in Mumbai, Delhi, Kolkata, Chennai, Ahmedabad and Hyderabad among 90 senior marketing professionals in June and July. Of all the brands launched in 2006, 26 were shortlisted for the Derby. The respondents were asked to rate each of the brands on a scale of four: Very successful, somewhat successful, not successful and don’t know. They were separately asked to rank the very successful brands. (See tables.)

Differentiate or die
The message of the 13th Brand Derby for marketers is that brands now need to make an awe-inspiring difference to capture the imagination of consumers, a la IPL or the Nano. The bar has been raised. Given the benchmark set by the two, anything which is merely excellent will not be good enough in the days to come. Global brands can now come out of India too — it’s a new dawn for Indian marketers and brand-builders.

The centre of gravity is towards brands that create gratification and not just perform some functions. Product categories that have high personal affinity have scored high on perception in the Derby. Thus, there are five cars on the list (the Nano, Swift Dzire, Hyundai’s i20, Tata Motors’ Sumo Grande and A-star) and three mobile communication devices (the Blackberry Storm, Nokia 5800 XpressMusic and Apple iPhone 3G).

There are a clutch of fast-moving consumer goods brands too on the list: Mother Dairy’s Nutrifit fermented probiotic milk drink, Maggi Cuppa noodles, ITC’s Vivel soap, Hindustan Unilever’s Aviance Men’s Solutions, Garnier Fructis hair spray and Maggi Bhuna Masala readymade cooking paste. Of these, Nutrifit has come out best in the success rating as well as the ranking, a clear indication that any brand that talks of good health and wellness has a better impact on consumers. People across the country have turned health conscious and want brands, especially food products, to talk the same language.

Time to engage
Product aesthetics are now a part of brand proposition. Two consumer electronics brands, Scarlet and Jazz LCD television from LG, did well in the Derby because of their aesthetics and high sensory performance.

The media and entertainment sector, like in the past few years, launched some very successful brands in 2008. Apart from IPL, there are two films (Ghajini and Singh is Kinng), two direct-to-home services (Big TV and Airtel) and one general entertainment channel (Colors). The import is clear: Entertainment’s engagement with consumers is on the rise. But the market is competitive and companies need to spend money intelligently on building their brands. Ad budgets for big films are known to be in excess of 20 per cent of the production cost.

Though Colors leapfrogged over rival Hindi general entertainment channels within no time with some innovative programmes (reality shows, soap operas and mythology), only 21 per cent of the respondents said it was very successful. Thirty-six per cent said it was somewhat successful and 11 per cent said it was not successful. More interesting, 32 per cent hadn’t made up their mind on Colors. In other words, it will take Viacom 18 some more effort to improve the brand perception of the channel. Brand-building and brand-reinforcement are exercises which never come to an end.

 

The Derby story
Past winners and defining trends

Financial service providers, real estate developers, retail chains, pharmaceutical companies and consumer electronics makers all spend big money on advertisements. Each of these markets is competitive and the brand therefore plays a critical role. Still, brands from these sectors have rarely done well in Brand Derby over the years.

In the last five editions, including the current one, not a single real estate company or project has made the cut, in spite of the fact that the sector has an annual ad budget of over Rs 500 crore. Only two retail brands have found favour: Reliance Fresh and Croma (both 2007). Though there are two consumer electronics brands in the latest Derby (LG Scarlett and Jazz), there was only one in the previous four — Haier (2004). The annual ad spend of close to Rs 900 crore of consumer electronics companies seems to have made little impact. Only two pharmaceutical brands have made it to the list: Cipla’s i-pill (2007) and Pfizer’s Viagra (2006). There are no mutual funds and only one insurance brand (Reliance Insurance, 2006).

Financial service products, say experts, miss out on perception surveys because they are not physical, unlike a car or a mobile phone. The consumer electronics industry has paid the price of spending a small proportion, just 3 per cent, of its annual sale (Rs 28,000 crore in 2008) on brand promotion. And pharmaceutical brands, says brand expert Harish Bijoor, have suffered from the restrictions on their promotion. “Most of the promotion therefore is below the line, which does not show up in a perception survey,” says he.

In contrast, most automobile launches have made it to the list. In each of the last five Derbies, the sector has returned at least one brand in the top six. In the latest Derby, there are two — the Tata Nano and the Maruti Suzuki Dzire. Even products that have not done well in the market were not perceived as unsuccessful launches — Fiat Palio Stile, LML Graptor, to name a few.

FMCG brands have been regular winners over the years — ITC Bingo won the 2007 Derby. Entertainment (films and television shows) too has done extremely well — television serial Jassi Jaisi Koi Nahin came on top in 2004, talent hunt Indian Idol was second in 2005 and Lage Raho Munna Bhai led the pack in 2006 (that year, Krrish was third and reality show Nach Baliye came fourth). Telecommunication brands have scored high too. It is of course the most heavily-advertised product segment in the country today. (India happens to be the fastest-growing telecommunications market in the world.)

This clearly is because of the high ad spends in these categories. Companies normally spend 12 to 13 per cent of sales on promoting FMCG products, about 15 per cent on automobiles and over 20 per cent on films and television shows. As there is hardly anything below the line here, they make a bigger impact on the perception of even non-users. Naturally, India’s best brand factories are from these sectors — Maruti Suzuki, Nokia, ITC, Hindustan Unilever, Toyota, TVS and others.