A pleasant marketing problem

Mergers and acquisitions were the order of the day during the pre 2008 days. It took a break after the fall of Lehman Bros and the ensuing recession. They are back again in town with the buying out of Paras Pharma by FMCG giant Reckitt Benckiser. Paras Pharma owns over-the-counter brands (OTC) such as Moov which is a pain relief ointment, Krack, a heel care lotion, and D'Cold, a cold remedy among others. RB adds these brands to its already established brands such as Dettol, Disprin, Clearasil, Veet and Durex.

This acquisition would leave RB marketers in a bit of a quandary. What sould they do about Dispirin and D’cold which almost are used for similar purposes. Headache, cold, clear throat. Although not a direct competitor with each others, it begs the question that what would be the solution when two competitor brands merge or are taken over for inorganic growth. Should they continue with the existing own brand and the newly taken over brand or should the new brand be killed to make way for a stronger home brand. To make it clear, consider this very hypothetical example. What if P&G takes over HUL? Or visa versa. Would P&G kill the powerful brand Surf Excel to further its own Ariel brand? Would it kill the powerful Sunsilk and Clinic for making Pantene and Head & Shoulders the favourite?

In this uncertain world with flexibility being the buzzword, can there be an obvious way for this problem to be solved. I know that the answer for this cannot be an absolute one but would depend on the type of companies involved and the power of brands taken over. For Arcelor steel merging with Mittal Steel or Tata with Corus, there isn’t much to think. Commodity market as such doesn’t give marketers sleepless nights as does consumer goods. But what about a Ranbaxy which is so ingrained in the Indian mind after it being bought out by Daiichi Sankyo? Would they kill the Ranbaxy brand to make DS a global brand?

A bigger dilemma would be when a ‘House of Brands’ takes over a ‘Branded House or a ‘Branded House’ taking over a ‘House of Brands’. What if Tatas take over P&G or HUL? Would we have Tata Pantene and Tata Clinic or would the brands retain their identity? What if P&G takes over Mahindra & Mahindra? Would Mahindra Tractors be replaced by an individual brand name without the family brand?

One thing is certain that creating a brand and an appeal requires a lot of resources. Maintaining requires even more resources and is difficult as well. Thus it seems at least that when two power brands come together under one roof, its better to pursue both separately and let them cannibalize the market as it would be a win-win situation even then.

Management graduates for the Indian economy?

An article in the Times of India, Mumbai edition on 6^th December 2010 drew my attention. It even made me think. And this article is a result of that thinking. Two pieces of opinion in the article were so contradictory that it made me smile. One, ‘a fancy MBA’ degree and two, ‘it accelerates growth’. It is agreed that MBA is a fancy degree yet head hunters are appreciative of the degree and find it a differentiating factor.

Having myself being a management graduate and working for more than a year now, I have a slightly different opinion on the management degree in the Indian context for an Indian professional. The Indian economy requires technical people more than management people. Engineers, commerce graduates, arts graduates, lawyers and other graduate streams. What is the reason for this erudite opinion of mine?

Lets look at the major streams in MBA. Marketing, finance, Human Resources and Operations. Of these 4, I will leave out HR and operations since the number of students opting for it are less compared to the more preferred marketing and finance. What is the use of a marketing degree? To increase sales in an ultra competitive marketplace and strategize to be one-up on competitors.

In India, apart from FMCG, telecom and white good companies, hardly marketing is required. The Indian consumer market is so big that even without marketing acumen, there would be sales. In the industrial goods sector, India’s cost competitiveness is going to hold it in good stead at least for the next couple of decades. The Indian PSUs such as ONGC or SAIL or NTPC are run by people who have tons of experience in the technical filed but not in marketing. Why can’t an ONGC be the next Chevron or BP? Why can’t a SAIL be the Arcelor or Severstal or Corus? Companies which inspite of being commodity producing companies are big brands.

The top managements of all companies barring a few who have the vision give the management graduates an opportunity to explore and work in a way which is transformation to the company. The other managements are very much resistant to change and like the comfort zone which management graduates try to break free from. The MBA graduates too are partly to blame for. They consider themselves equipped to change the company without understanding first the basics of the business. Their arrogance sometimes can be annoying.

The MBA degree has been seen as a magic wand which transforms the career of students. Students believe that the MBA degree should give them six figure salaries. They don’t think of whether the skill sets they have are applicable in the industry. Theory knowledge can take you only past the interview round. But the actual industry skill sets are to its extremes making it difficult to survive. The mushrooming of management colleges without affiliations and proper B-school teachers has resulted in students lacking the basic skills expecting to be in strategy teams of the corporate world.

Thus I think, a management degree is not essential to the Indian economy. Functional skill sets are more important except in certain industries and markets.