Isn’t it a contradictory copy? The headline says that there are 1000 reasons why you should visit a Volkswagen store else you will regret it. The body copy says that “besides superior German Engineering, there’s now a great reason to head out to ….”. It means that there are only two reasons. The ad is simply exaggerating. Moreover, I really can’t see 1000 reasons to visit a Volkswagen store. A boring attempt at an ad.
Can you think of an Indian brand which commands a ‘premium’ tag? Let me define a premium brand first. A brand which commands a price higher than its immediate competition and is bought more for its intangible benefits than attributes. Agreed. There are some brands. But would it stand the test when confronted with international competition? At least I could not find any such Indian brand.
A similar problem with all the emerging nations. Less said about the under developed nations, the better. China and India have always fought international competition based on price. They have been few times, if any, when they have talked of quality or snob value. India or China has never had the technological wherewithal or resources in terms of money. Let’s talk of India.
The Indian consumer after independence through to the nineties was bought up on self-sufficiency and socialism of the Nehruvian era and then the Indira Gandhi era of nationalization. Conspicuous consumption was frowned upon and would attract the eye of the taxman. No wonder India has the highest savings rate along with China. It is only after the liberalization process started in 1992 that Indian masses got the resources and options to spend. 2000s saw the start of the consumption cycle. With easily available financing options and plastic money to fuel demand, consumerism had finally arrived in India, much to the satisfaction of MNCs. The urban middle class soon found surplus money with increasing salaries of IT, pharma, services industry employees finding their way into the mushrooming malls. With an urge to show their arrival on the ‘richness’ scale, people splurged as if there was no tomorrow.
Thus we saw major international brands such as Tissot, Rolex for watches, designer apparels, bags, shoes from renowned designers such as Gucci, Jimmy Choo, Louis Vuitton, hospitality giants such as Marriotts, Hyatts among others. Indian domestic brands obviously could not fight these acclaimed international labels on snob value. The only option remaining was to fight on price to drive volumes and be profitable. We saw Videocon taking on the Sony, Samsung, LG in consumer electronics; Maruti Suzuki taking on Hyundai, Ford, Fiat, and lately Skoda, GM among others in cars. Even now we have Tata Nano as the world’s cheapest car fighting on price. Although it has been touted as an innovation to cater to the bottom of the pyramid consumer, it still fights on price.
Moving from consumer goods, even the commodities such as steel, cement, food (sugar, rice, wheat, meat) are exported based on price difference rather than its high quality or rare sweetness and exquisite taste or looks (specific to flowers). I am not questioning the quality here but just the business appeal for a prospective customer.
India’s real tryst with a premium brand came when Tatas took over iconic and marquee brands Jaguar and Land Rover. They have retained the names and not added Tata to the newest family member because the primary market of these brands is Europe and Americas, and Tata isn’t even a renowned name in cars, let alone a premium name. Woodland is an Indian brand which can be considered as a premium Indian brand but not compared to its international counterparts such as Adidas, Nike, and Reebok. It should be given its due though because it has all the makings to take the brand global. I doubt how many Indians know that it is an Indian brand. Credit should be given to its international type of communication in TVCs, print and online media where it has international models as its ambassadors.
Indian motorbike companies such as Bajaj Auto, Hero Honda, TVS, it would take a lot of effort to become a premium brand since majority of their offerings are for the mass markets in India and abroad. Same is the case with the car maker Maruti Suzuki, and Tata motors. Maruti Suzuki has been successful in the last decade or so in scaling up till only the 8 lakh car. Ditto Tata Motors. It has yet to take on the 10 lakh plus luxury car segment comprising of the Skodas, Volkswagens, Toyotas and the super luxurious Mercedeses or BMWs.
The IT sector is famous the world over yet Infosys or TCS or Wipro isn’t considered as an innovative brand. Google, Oracle, Microsoft, Yahoo, SAP are brands due to their innovation. The Indian brands are still fighting on price. But now we hear talk of Infosys trying to move beyond just the IT solutions and get into consultancy which would make them in direct competition with heavy weight such as Accenture, BCG, Booz, Allen Hamilton, and other. Of course, competing with them would need another decade of experience but at least there is a start.
There have been a spate of acquisitions in the last decade by Tatas, Birlas, Ambanis, Mallyas and others which would hold us in good stead to get an Indian premium brand. Till then that premium Indian brand remains elusive.
Taking on the establishment or taking risks, runs in the Bajaj family. From Rahul Bajaj championing the cause of Indian industry to stop foreign players into India to his son shifting focus from the cash cow scooters to motorbikes to take on the Japanese players in motorbikes to the radical thought of making Bajaj Auto from a ‘Branded House’ to a ‘House of Brands’, surely they are a family who think to out-maneuver competition.
Rahul Bajaj was initially averse to the idea the bikes sporting individual brand names and Bajaj Auto will be a house of independent brands like FMCG giants Unilever and P&G. The focus was to be on four brands – Pulsar, Boxer, Discover and KTM. It would not use the parent name on its identity. But with the success of Bajaj Auto as one of the leading motorbikes manufacturers and stopping the scooters with Rajiv Bajaj at the helm, the senior Bajaj has to accept it.
Now with the help of one of the leading Marketing gurus and management consultants Jack Trout of Trout and Partners who has given the positioning bible to us, Rajiv has taken an enormous step. An attempt to associate the Bajaj brand name exclusively with the motorcycles made by his company and the removal of Bajaj name from other products/ services ranging from hair oil, home appliances, insurance to financial services.
The strategy to do this is based on Trout’s thoughts that a particular brand must stand for only one thing in the mind of the consumer. Line extension is the gravest mistake any brand can do. This though not a line extension has similar areas. According to them, Bajaj should stand only for motorbikes in the consumer’s mind. All other Bajaj brands such as Bajaj-Allianz, Bajaj Electricals, and Bajaj Finserv among others should remove the brand name and try to get an individual identity. This would not only help them stand on their own accord based on brand qualities and brand values but also act as a differentiation from competition.
I tend to differ with the thought because the principle which applies to brands in the developed world is being applied to the developing world that have emerged and evolved in a different way. The consumer behavior is starkly diverse and the emotional quotient among brands in the eastern world is far more pronounced than in the west. In India, line extension has worked till now because of the trust that has been instilled in the brand. Tatas, Birlas, Godrejs, Ambanis and a host of other family have run businesses have ventured into diverse fields with using the same brand name. And they have done well and continue to do so.
These brands have evolved since the pre-liberalization days and have a trust and understanding among Indian consumers. New brands have emerged since then but these old brands have stood the test of time. The Tatas cannot even think of removing the name from their diverse offerings to make Tata a ‘House of Brands’.
Changing the automotive business and marketing it individually is one thing but doing it across industries is slightly off target I would presume. One of the biggest brands in the world GE, which has a product offering which no company, can boast of. There are into all products and services ranging from consumer goods to aviation. They have not changed their GE lineage inspite of being in the most competitive and diverse market as the US. Bajaj name is even more important in the rural and semi-rural areas of the country which are yet to be tapped. Bajaj name would give the company a head start over other foreign brands.
All said and done, this is even more difficult since some of the Bajaj businesses are run by other family members who are strictly against the name change. So such a thing happening would be highly improbable if not impossible.
Consumer involvement in a purchase decision is highest when it comes to buying a house be it in India or anywhere around the world. This is not only important from a marketing point of view but also from an economic scenario. We have a live example of how the urge for buying a house i.e. the US housing bubble created an economic crisis. Closer home, we have HDFC which has one of the highest recalls amongst home buyers and general public alike because it helped the Indian consumer buy a house during the pre-liberalization era.
After a house, the car becomes the second most important decision concerning a family. A car is as much as practical decision on price and features as it is an emotional one. Don’t we all remember our first cycle in childhood or bike in during college days. How we took care of it. Similarly there is an emotional bonding we have with our car. Not just for the husband but also for the wife and kids. The family has been used in umpteen numbers of ads on television to sell cars.
The Volkswagen Vento TVC currently running on GECs on prime time takes this emotional quotient a step further. The communication route adopted for the TVC is ‘tears of perfection’ by car engineers. It shows the various stages that the car goes through during manufacturing with so much emotional involvement that it is difficult for them to let go off the car from the plant. It indirectly also refers too its old communication of German engineering. The plant snaps show the sophisticated equipment and the fabulously clean set-up.
Volkswagen had to build an emotional connect with the Indian consumer for whom Tata, Bajaj and Maruti are natural preferences in terms of sentimental value. A wonderfully executed ad which brings out the emotions which surely will ad to the already high brand equity which Volkswagen enjoys. Not an ad which breaks the clutter but certainly will make the male of the house and young professionals take notice.
