Endorser Actions, Brand Value and the Ousting of Salman Khan

Every brand today wishes to forge a connection with its consumers. A strong connection leads to higher brand recall, and there is no simpler way to do this than by hiring a celebrity Brand Ambassador. Celebrities, by virtue of their public personalities, have distinct imagery and associations pre-formed in the consumer mind; and when consumers see these celebrities endorsing a certain brand, they form mental connections between the attributes of the star and the attributes of the brand. MS Dhoni for Lava mobiles, Ranveer Singh for Ciaz, Akshay Kumar for Honda, Shahrukh Khan for Jio are all examples of Brand Ambassadors.

Another good example is that of Joy, a brand of skincare products, which has recently hired the television comedian Bharti Singh as its celebrity endorser. Joy being a relatively new brand wishes to position itself along the lines of ‘beautiful by nature’, i.e. as a brand that relates to internal beauty and not the external image. The decision to hire Bharti breaks general convention in the skincare segment as she, unlike endorsers of other similar brands, is clearly overweight. But her strong and confident persona, transfers those qualities to the imagery of Joy in the consumer mind. This transfer of attributes from the celebrity to the brand is the reason why paying such high fees to these stars is justified. Any other lesser known face would not have evoked these pre-developed associations that a famous star can, and hence would be less effective.

The connect that a consumer feels with a celebrity is dependent on something called the self-concept, the perception that the consumer has of himself. A consumer or a fan will identify with the celebrity when he perceives his own self – his values, attitudes, behaviour -to be similar to those of the star. Celebrities appeal to the self-actualization goals of aconsumer. Based on his self-concept, a consumer places the celebrity into either an aspirational group (he wants to be like the star) or an associative group (he believes his qualities are already similar to the star). Virat Kohli, Rafael Nadal, Ranbir Kapoor are all role models for the young men in our country. Similarly, Saina Nehwal, Kareena Kapoor, Alia Bhatt are role models for the women.

Associated with the self-concept are the feelings of pride and shame. Pride is defined as a positive emotion that is experienced following a positive evaluation of one’s competence or effort in achieving a goal. Shame is be defined as a painful feeling of guilt, wrongness,inability or failure. These two emotions can be visualised as forming a continuum. Just as at home, when a child scores good marks, the family experiences pride and vice versa, similarly if a brand endorser that we adore does a good deed, we would experience pride.

 

This pride enables us to feel good about the brand as well. For instance, Akshay Kumarvoiced his ‘nation-first’ opinion against actors from Pakistan, lending nationalistic associations to the brands he endorses, notably to Honda. His opinions enhanced the consumer’s pride in use of Honda vehicles. However, the opposite is also true, and consumers may experience shame on being related to the brand ambassador.The brand manager’s task, therefore, does not just end on hiring an appropriate celebrity.

Companies must continuously monitor the activities and statements of its endorsers to minimize incidents that cause shame. As the celebrity loses his credibility, the brand risks losing the trust that consumers place in it as well. The incredible India campaign faced this issue with Aamir Khan, Accenture with Tiger Woods, and very recently Thums up with Salman Khan. They were all promptly fired, and wisely so.

Contributed by Harleen Kaur (my doctoral student at FMS)

Maruti or Suzuki or Nexa or S Cross: killing two birds with one arrow is bad strategy

First came the teaser campaign on television which left audience to wonder what Nexa is. The ad campaign used ambiguity route to creating curiosity to capture attention in otherwise highly cluttered communication scene. These were sleek and finely executed and managed indeed to build expectations that something premium is being launched. The clues that made up the ad- words like ‘feeling’, ‘joyous’, ‘amazing’, ‘pure’, ‘indulgence’, and ‘exclusive’ coupled with visuals of fast moving light, finely cut suit, smart men, expensive watch, trimmed beard, close up of eyes, and expensive box (probably containing keys)- did manage to create an impression of upscale and out of the ordinary. But it was not a campaign for car, as one thought initially. Rather it was campaign of a new car showroom.
The company, Maruti Suzuki launched new branded showrooms with proposition – ‘new hospitality experience’. The purpose is to sell high end vehicles though these Nexa showrooms. The company claims to have hired staff with experience in hospitality and aviation with the focus that these sectors equip their people to deal with wealth customers with high soft and communication skills.
The bread-and-butter Altos and Swifts won’t be retailed at these outlets. The NEXA-branded showrooms will try attracting customers looking to buy vehicles priced Rs 8 lakh and above.
The showroom ads were followed by the launch of X Cross, cross sports utility vehicle. The car is designed to have looks and style distinctively different from its current range. And its print communication reminds of ads of Mercedes Benz (may be due to similarity in font) and ad format.
This twin salvo is aimed to help the company shed its dilute its image of mass car producer to move up the price point. The company has already experienced failures in its earlier attempts to move up the car hierarchy with variants like SX4, Balneno and Kizashi. To undo what it did in past the company the company is seeking to produce high end cars with greater engineering, performance and appearance coupled with new branded channel of distribution (superior in store experience).
In supposedly an innovative way, the company is seeking to reach out the premium customers with premium branded showroom experience. The question arises, is this actually a right move to cater to a segment which earlier refused to patronize Maruti Suzuki’s premium vehicles? And was this rejection based on lack of availability of ‘branded showrooms’ and ‘hospitality experience’?

The ads of S Cross which zoom in on a swanky finely crafted car to reveal its identity through ‘S’ letter on the grill comes as an anti-climax. The hype build by Next and cleaver maneuvering of camera in introducing the vehicle does what it is not suppose to achieve- it is an “S” or ‘M’ car. It should have been a ‘N’ car distantly related to Maruti-Suzuki. But ‘S’ on the grill makes is closer to ‘M’ which is what led to rejection of company’s premium entries. The customers did not reject Maruti’s premium cars on the grounds of their performance. The rejection was due to imagery and perception.

Nexa, different exclusive branded showrooms is a good attempt to physical separation of customers and brands-mass and premium. But car branding reverses it. The premium segment play is certainly about performance, but it only operates at hygiene level. The motivation operates at the psychological level. The most important reason to buy a premium product/brand is to achieve distance from the mass- at psychological level. But ‘S’ and ‘M’ on the premium offerings of Maruti-Suzuki would continue to hound it like an invisible ghost. The lure to leverage brand equity directly sometimes proves fatal, the Company should have learnt it long time back.

Rahul Gandhi, Branding, Confusion, Complexity and Connection with People

Brands have become relevant in modern society for a variety of reason.  Urban life is very complicated compared to rural life and life and the past was simpler than what it is now.  What does complication mean in contrast to simple? It means tangled, difficult to unravel or understand, intricate, arduous, convoluted, knotty, and abstruse. Confucius said that ‘life is really simple but we insist on making it complicated’.  Let us just focus on complication from marketing perspective.  The markets are flooded with endless product and brands. Does explosion in choices add to pleasure? Answer is that beyond a point excess of anything becomes a burden.  The product, brand, and feature explosion make choice difficult instead of simplifying it.

Can an average customer actually make a choice of a LCD or mobile phone or even toothpaste in rational manner? Probably not, brands in this context assume significance because they have become short cuts to negotiate complicated and confusing choice terrain. Brand acts like an ‘information chunk’ or ‘short cut’ or ‘short hand’ or ‘engram’ or ‘trust mark’ or ‘love mark’ or ‘signature’ which simplify choices.  Two of the important facets of a brand are visual and verbal. Brand name and visual symbols become signifiers of what a brand truly stands for. For instance ‘Apple’ word verbally and the ‘apple’ fruit visually communicate the essence of what Apple brand stands for.  In this sense every brands appropriates or assumes or envelops a meaning in its fold. A brand name in the absence of a meaning is nothing more than a hollow symbol.  It must be understood that a brand name is nothing but a signifier; it conveys what a brand stands for. It is carrier of a meaning. Meaning is far more important than the name.   

Name per se is likely to assume important when all available option are devoid of any meaningful difference. Therefore in commodities, name may alone be a differentiator and can potentially attract customers.  For instance if eggs produced in farm are similar but are given different brand names the customer are unlikely to be evenly distributed among different brands. The reason, name causes differentiation and creates liking which depends upon how a name is elaborated. For instance a name may be closer to your name or son’s name or linked with pleasurable event in your life. I remember my grandmother liking Congress just because it had a symbol of ‘cow and calf’ just because it reminded her of her own cow or lamp symbol of Jan Sang. 

Political parties in India have long relied upon peripherals to attract voters like cast, religion and other symbols (wearing a skull cap) name (Shiv Sena,  Samajvadi Party).  Peripherals assume significance when customer/voters are immature or incapable of making choices based on thinking. All these provide short cuts to voting. But as customers become mature, discerning and discriminating the peripherals are pushed to background and substance take the front seat. Names like Haldiram and  Hazoorilal may not be acceptable to many but they are good brands because name is ultimately a signifier, signified is what people want.

Rahul is a good name. If you add ‘Gandhi’ it becomes better for it leverages equity of Nehru, Indira and Rajiv. But unlike the past when people (people who remembered INC and its role in freedom struggle) voted for the name or symbol, the new generation which constitutes a significant portion of voting population is unlikely to be impressed. For the youth of this country now the word ‘Gandhi’ is only a sir name like any other name- this does not add any equity. Rahul is a good looking relatively young person. This may ring bell with some naïve (who get moved by looks in politics too) but young generation is far more educated, discerning and discriminating. They know good looks are a qualification in media or movies not in politics (now even not so good looking actors by conventional yardstick are successful).

 In this background, what is needed is for Rahul Gandhi  is convey what he stands for besides a good looking young politician who is a Gandhi.  Political choices like any other product category are complicated because there are many political brands which make competing and often confusing claims. Gone are the days when political parties could succeed simply by miscommunication or over communication. Now people what to make informed choices. Political campaigning is not as much about image making as communicating the substance.  Thus the essential important question is what Rahul Gandhi stands for and electorates want to know that.

One of the cardinal rules of branding is that brand must stand for a concrete idea- like Moov stands for back pain relief; Pepsi stands for the young, Head and Shoulders for dandruff.  What does RG stands for? Not many of us have a clear idea. In the absence of clarity of what he stands for, it is very unfavorable situation for him as people do not buy brands which either stand for many things or do not stand for anything. Confusion is antithesis of branding, especially when people live complicated lives which leaves very little time and energy with them to resolve it.  When confused, it is much easier to move on to the next clearly defined alternative or to avoid the situation. 

Brawn, Brain, Strategy and Micromax

What do you call a company which manages to touch Rs 2000 crore revenue and achieves third position (volume) in an intensely contested industry in just five years? The answer can be none other than, brilliant.

When it comes to thinking about electronics space only giants of the world come to mind like Samsung, Apple, Sony, and Intel. And narrow this search down to the field of mobile phones, the mind does not stray beyond a small but firmly established brand like Nokia, Samsung, Blackberry, HTC, Sony and Apple. Try stretching the category further the list gets enlarged with more brands but only with powerful (in own way) like LG, Motorola, Philips, Dell, and Acer. Prima facie it appears as if the industry is only meant for big and powerful hence a simple ‘to enter or not to enter’ analyses would yield a negative result. Any entry in such a situation is likely to invite fierce retaliation aimed to prevent the entrant from getting a toe hold in the market. The battle could really be bloody especially when players are armed and have deep pockets. But then, the joy of winning is in outmaneuvering and outwitting the big. When physical resources can’t be matched, the fight should be shifted from brawn to brain.

An opportunity identification exercise normally fails to yield structure defying perception and hence hints at the most obvious clusters of customers. The ‘most obvious’ ways of looking at the market creates majority fallacy (the attractive segments get more competitors than what can be absorbed). So when everybody is going up, it may be a good idea to go down. When competition is about ‘value enrichment’, ‘stripping down’ may make sense. A fresher structure defying perception is what is required to apprehend an idea which has been escaping the attention. So what makes Micromax, an Indian start up take plunge in a market of ‘big boys’ and steal the thunder under their nose?

Consider the implicit and tacitly agreed code/ structure: quality and price are positively correlated, aesthetics (form) is for the top tier and bare functionality is for the lower ends, new and innovation take time to diffuse (or reach the lower end of the market, cautious buyer); brand building (customer pull) is meant for the top players, push is the strategy at the lower end; and post purchase care is the preserve of top end brands. The codes of operation in a market evolve after a complex negotiation between the structural impositions and market considerations. Now consider how Micromax’s strategy is based on the reconciliation of the irreconcilables. An appropriate brand name (unlike Lava or Fly or G- Five, right for the technology space), functionality fused with aesthetics, and brand esteem (sign off ‘nothing is anything’, association with cricket events- IPL and Akshay Kumar).

First of all is Mircomax a challenger brand? Probably not. The brand did not rub the established players the wrong way by choosing to target the customers left out by them (deemed unattractive). It is first phone was aimed at rural market packed with a huge standby time (X1i- to take care of electricity problems) priced affordably at about two thousand rupees. It hit at the uncovered flank. Then their strategy moved on to target lower end of the segmentation spectrum.

The common wisdom narrowly limits the concept of value to price if the brand targets the economy segment. Micromax recast the value equation and focused on the total value proposition (TVP) rather than price proposition. The brand focused on maximization of TVP by simultaneously focusing on price as denominator and brand attributes as numerator. Factor in qwerty pad, dual sim, battery life, built quality (touch and feel), operating system, processor, brand esteem and confidence with the reasonable price. This is true for their other products like tab. People tend to be value sensitive not price sensitive.

The brand managed to create a pull by shifting customer thinking away from the price to the’ form and functionality’. This imbued the brand with aspirational value within its class. Take a look at brand’s A70 ad which showed an i-phone look alike with a headline which read ‘i-phone with a scribble ‘can afford this’in between ‘i’ and ‘phone’ making a complete line ‘I can afford this phone’. This strategy of linking Micromax with the iconic ‘Apple’ brand (incomparable) cleverly makes it comparable (similar strategy was used by Avis once upon a time ‘we are number two … therefore we try hard’). Twinkle Khanna acted out as endorser for its ‘Bling’ range, especially designed to attract women customer. The ads using Akshay Kumar seek to transform customer experience by instilling pride of brand ownership (‘Hide anything but your phone’ and ‘If you have it, flaunt it’).

Another distinguishing aspect of Micromax is its branding strategy. The brand instead of putting all product variants into one umbrella has very carefully adopted sub branding strategy to clearly signify segments and their propositions (avoid confusion). Consider sub brands in its range include Bling (style conscious urban women ), Ninja (android phone for working professional), Modu (technology enthusiasts), and Superfone (people who want applications). The company has been creating a portfolio of brand that is sync with emerging demographics and consumer life style. As dividing line between customers get sharply etched the use of one brand runs counter to market reality.

Starting as a mobile instrument player, Micromax has moved vertically and horizontally in the market- space of its origin. Its quest of growth has found expression in its expansion into adjacent space of tablet market (Funbook). The company has met with fair amount of success in the tablet space. In its latest move the brand has been extended into television monitor and home theatre space. Tablet and mobile phone appear to be in close physical and mental proximity hence success in one category may rub off equity well in the other. It is worth watching how this plunge of Micromax works out in consumer electronics space.

Often success breeds its own seeds of failure. The move to create a ‘be all’ brand militates against the idea of market fragmentation. One of the oldest icons of consumer electronics has been Philips. The news that Philips is moving out of consumer electronics was painful reminder of the fact that one brand cannot hold it all.

Brand Equity, brand power and trust deficit

Brands are about mediation. Most exchanges, whether personal or commercial, are power games. In business there is nothing like authority to command buyer behavior. The two ends of the marketing continuum- the seller on the one hand and the buyer on the other- struggle to gain control over each other. Pursuit of self interest is not a bad idea. The competition strips the marketer of his power and favours customers. Marketing seeks to reverse this. Power is acquired, authority is formally given.

The Brand Equity survey of the Most Trusted Brands lists the top ten this year as: Colgate, Lux, Airtel, Lifebuoy, Nokia, Dettol, Britannia, Vodafone, Maggi, and Closeup. What does it mean to have a trusted brand? Probably there is connection between trust, power and performance. Trust allows a brand to gain power over customers which ultimately translates into superior financial performance. By building trust marketers can easily knock off rivals from customer consideration and thereby create monopoly in the competitive setup of the markets. Branding in this sense is about monopoly creation. Monopoly is detested for its suboptimal economic outcomes . That is the reason why most free economies have anti monopoly and pro competition legal framework.

From the customer perspective brands are important. There is pervasive trust deficit in almost all walks of life. The institutions are not able to keep up with the emergent changes. Take the political upheavals in Egypt and Libya, the financial crises enveloping the global economy, September 11, Mumbai attacks and terrorism, scams and corruption in political system and neighbour relations. How is one to live in this environment of suspicion, doubt and distrust? This impacts both physical and psychological well being. It causes tremendous strain and fear. A sense of loss of control pervades one’s existence.

Set against this background, at least in consumption situations, brands symbolize consistency and certainty. Brands are tension reducing mechanisms. Amidst uncertainty brands are assuring and comforting. Imagine existence in a world without brands. The luxury to short cut buying would not exist. You would not have reached out for your tried and tested brands. Brands simplify life by providing opportunities to develop short cuts. The mental eloquence so saved is used to resolve other conflicts.

The branding agenda has evolved over time. Branding began for the purpose of ‘identification’ (a mark on cattle helped identify the ranch). As production and consumption roles got divorced and markets came into existence, this function assumed significance. For many, branding is about creating ‘trust marks’. This is about delivery of reliable products or services. German and Japanese companies ushered in this era. But now certainty of performance is not a differentiator in many product categories. It is a common denominator. Accordingly marketers in their bid to control buyer behaviour and gain power, approach branding with an aim to create ‘love marks’. Branding in this sense is about transcendence beyond what is embedded in the goods or service element of the brand. The idea is to liberate the brand from its ‘productness’ and put it on space of ‘non contest’ by embedding it with a ‘transformational’ capability. A brand, from this perspective, becomes a very personal and intimate experience.

Tata Motors: ‘More car per car’to ‘more luxury per car’ and carpet bombing

In the recently announced results Q2 (September 2011) Tata Motors posted great results. Its net profit registered an increase of about 100 times to Rs 2223 crore compared to Rs 22 cores of the previous year. , Tata Motors posted Rs 1600 cores as against Rs 22 cores Q2 2011. This is an impressive turnaround. Tata Motors has become a matter of debate when it acquired Jaguar Land Rover (JLR) spending whopping $2.5 billion (Rs 12500crores) dragging the company into red (consolidated net loss of Rs 2505 in 2008-9).

Tata Motors is at the top of Indian automobile industry. It participates in both commercial and passenger vehicle markets. In a short span to time the company has evolved from primarily being a maker of commercial vehicles to a force to reckon with in the passenger market as well. Has the trajectory of the company something to do with architecture?

Ratan Tata is an architect from Cornell University. An architect is different from an engineer. Architect is trained to have a global perspective whereas engineers by are possessed by details. Architects have an integrative mindset by which they visualize parts as a whole, engineers are narrowly focused (I owe this to my discussions with Prof Mitra yesterday). An architect’s role is to visualize a structure by observation of both what is ‘present’ and what is ‘missing’. Tata Motors under the stewardship of Ratan Tata is carefully architected into a complete motor company not merely a company with different divisions. An aggregation of parts is not the same as an integrated ‘whole’.

Let us turn to the company’s architecture. Starting as a locomotive manufacturer in 1950 the company went on to expand into commercial vehicles. The ‘Tata’ name and the symbol ‘T”, as a result, got inextricably connected with commercial vehicles. With the sight of burgeoning passenger car market, the company entered the market with ‘Tata Indica’ (combination of ‘Indian’+ ‘car’) with the proposition ‘more car per car’. The idea was to lure price/ value sensitive buyer and company generated huge volume. This success was followed by moving up to the next level of sedan and then came ‘Indigo’( 2002)This was three box or sedan version of Indica. The brand Indigo derived from Indica (‘Indi’ used to leverage upon the equity) was further expanded by adding a station wagon variation ‘Indigo Marina’ (‘Marina’, attempted to indicate the modification, 2004). Later in 2009 the company further expanded its Indigo sedan range upward and launched ‘Indigo Manza’. This extension was meant to take the Indigo brand further up as the brand was given an image of luxury (the color, body shape and features underwent a change). Meanwhile Indica brand was toned up (V2 and Vista) and horizontally ‘Xeta’ was launched to branch into the petrol segment. Besides the movement upwards, the company moved downward by creating an ultra economy segment by the launch of ‘Nano’ (2009). In its latest move the company has launched ‘Vista’ (2011). A premium hatchback positioned as a compact which offers sedan like experience. In terms of branding and communication the company, ‘Vista’ plays down its connection with Indica to give it a new image.

The company leveraged its diesel engine prowess and also grew by moving into adjacent segment of the vehicle market by launch of SUVs. Tata Sierra and Tata Estate (now discontinued) and Tata Sumo were early entries into this segment. Tata Safari (launched in 1998) later fitted with ‘Dicor’ engine became a serious player. In 2010, the company launched a ‘cross over’ vehicle named ‘Aria’ combines three concepts: sedan, MPV and SUV (2011).

In the sedan market, now the company faced a challenge further to ‘move up’ in the segment hierarchy. The top ends of the car markets are dominated by companies with heritage advantage. The luxury brands besides functionality are created by heritage or pedigree and ‘exclusion’. The class connotations are generally the hall mark of luxury brands. Tata’s equity leveraged very successfully into the lower ends of the market was inept for this segment. And then came JLR acquisition. This leapfrogged the company into a space which excluded a company like Tata. A company can make cars as fine as Jaguar or Land Rover, what can’t be manufactured is the ‘imagery’ associated with brands like these. These are formidable barriers to entry.

Tata Motors starting with Indica (1999) both moved up and down  and horizontally to participate in adjacent segments. It is akin to carpet bombing by which attempt is made cover up the entire target area so that no space is left out. The growth trajectory that the company has adopted certainly has something to do with the discipline of architecture. The company has been architected to be serious player in the emergent car market flattened by the forces of globalization.