Daimler, the world’s largest truck maker by sales, a few days ago announced a new brand for India called BharatBenz. It will be one of Daimler’s five brands worldwide. The German truck maker will invest Rs 4,400 crore in a new facility near Chennai, which will help it take on local rivals like Tata Motors and Ashok Leyland as well as global ones like Navistar (with Mahindra & Mahindra), Volvo (with Eicher) and Man (with Force Motors).
The market for trucks, a good indicator of economic activity, has grown six to seven per cent per annum in the last decade. This has made India the third-largest truck market in the world. In this fast-growing but crowded market Daimler perhaps needs a brand that connects well with the value-conscious Indian transporter and tells him that its trucks are designed just for him. BharatBenz makes sense.
Sometime towards the end of March, Philips, the leader in the market for bulbs, tubes and CFLs, will hold an offsite in Goa. It plans to unveil some new products to its employees and associates which could extend its reach in the mass category. The company doesn’t want to call these initiatives bottom-of-the-pyramid but says the prices would be irresistible for the rural markets. The products are under wraps, though it is known that the company has developed a solar lantern.
This is not the first time that the Dutch multinational corporation has attempted to move down the value chain. In 2009, it had worked on a wood stove that could be sold in villages. But pilots run in some parts of the country showed that the price points needed to be brought down further. Philips’ engineers have taken the stove back to the drawing table to knock off some costs. The bottom line is that Philips is ready to lend its name to low-tech products.
What this shows is that the Indian market has truly arrived on the radar screen of global corporations like Daimler and Philips. So much so, they don’t mind a desi twist to their brand. A brand is a huge asset on any company’s balance sheet. Forward-looking companies constantly get their brands valued. Almost all protect it with a lot of zeal. It’s the job of every brand manager that the brand is seen in the right company and context. That multinational corporations are willing to adapt to Indian conditions shows clearly the country’s importance in the new economic order.
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One could argue that this is not the first time that global brands have Indianised. Honda let Hero get added to its name, just like Suzuki took on TVS and Maruti. But those collaborations were formed in a different era. Honda and Suzuki had no option but to go with local partners; hence the hybrid brands. Things have changed since then. Honda has come on its own and will soon shed the Hero tag altogether. Suzuki has shaken off TVS. Its cars, earlier badged Maruti Suzuki, now sell under the Suzuki logo.
It would also be worth recalling PepsiCo was let in to the country as Lehar Pepsi. But the prefix has been all but dropped — packs still carry the full name, but in small print. (PepsiCo sells namkeen under the Lehar brand, though.) Bausch & Lomb too had agreed to add to Ray-Ban in India because the production of foreign brands was not allowed. But the need for that did not arise because the rules soon got liberalised. (The eyewear brand has since been sold to Luxottica of Italy.)
Notable exceptions have been companies like Hindustan Unilever. Though most multinational corporations in the fast-moving consumer goods space like to have one portfolio for the whole world, Hindustan Unilever has adapted well to Indian conditions. For example, it had introduced Nihar in the hair-oil market, though hair oil is a product used only in the Indian subcontinent, and no multinational corporation wants hair oil in its portfolio. Nihar got sold to Marico. Hindustan Unilever tried again to crack open the market, this time with the Sunsilk brand.
Things have moved at a fast pace in recent times. Multinational corporations have seen the pot of gold here, and are, therefore, eager to get off their high horse. American Express, for instance, is planning a huge expansion into the mass market. At the moment, it is positioned at the premium end — to hold an American Express card, you need to have annual household income of at least Rs 8,00,000. But now it is ready to move down the value chain and tap the opportunity in financial inclusion. It wants to come out with prepaid cards for lower-income groups. The debit card could be an all-new brand created just for India.
Plans are afoot to come out with electronic payment terminals for small retailers. American Express also wants to get into remittances between commercial hubs and villages in the hinterland. This would take American Express off high-street addresses to the poor parts of the country which export labour to other states. But American Express is aware of the upside. Similar problems of inefficient non-electric payments exist in several other parts of the world. If a workable solution can be put together in India, it could be taken to the rest of the world as well.