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INDEX
THEORY
Pg 1 to 18
Pg 19 to 29
Pg 30 to 39
Pg 40 to 49.
Brand Loyalty and Equity refer to the notion that some brands are "stronger" or
better than others.
3. Perceived Quality is one of the key dimensions of brand equity and has
been shown to be associated with price premiums, price elasticitys, brand
usage and stock return. It can be calculated by asking consumers to directly
compare similar brands.
4. Leadership/Popularity has three dimensions. First, if enough consumers
are buying into the brand concept it must have merit. Second, leadership often
taps innovation within a product class. Third, leadership taps the dynamics of
consumer acceptance. Namely, people are uneasy swimming against the tide are
a likely to buy a popular product. This can be measured by asking consumers
about the product's leadership position, its popularity and its innovative
qualities.
Personality:
This
element
is
based
on
the brand-as-person
perspective. For some brands, the brand personality can provide links to the
brands emotional and self-expressive benefits.
7. Organizational
Associations:
This
dimension
considers
the
type
of
Awareness Measures
8.
mind and involves various levels including recognition, recall, brand dominance,
and brand knowledge and brand opinion.
9.
often provides a valid and dynamic reflection of the brand's standing with
customers.
10.
Price and Distribution indices: Market share can prove deceptive when
Financial Perspectives
There are several possible ways to measure brand equity in financial terms.
Market Transactions
Brand equity is estimated by identifying comparable mergers or acquisitions.
The premiums paid for those companies are associated with the equity in their
brands. Data is scarce for comparable M&A's, however, and buyers could have
paid more or less than the true value of brands.
Price/Earnings Multiple
Multiplying current earnings by an estimate for P/E multiple yields an equity
price. The critical step is estimating the P/E multiplier. One approach that has
been taken is to measure brand strength by a weighted average of seven factors.
(Penrose, 1989) Next, the P/E multiplier is estimated using and S-shaped
relationship between brand strength and the P/E multiple that is based on
similarities to risk free rates, industry rates, and other factors.
10
duplicated by competition. This would lead to ever decreasing profits, decay, and
eventual bankruptcy. About the only aspect of the marketing mix that cannot be
duplicated is a strong brand image." This quote clearly demonstrates the
importance of managing brand equity. In many categories, brand equity is the
only point of differentiation between products.
Many people may think that building and maintaining brand equity is solely the
responsibility of brand managers, but it is actually a cross-functional team
effort. Financial managers are important because they can fully analyze the
costs of maintaining and building brand equity. For example, launching a new
brand is extremely consuming in terms of money and time. It may be more cost
effective to extend a current brand than introduce a new brand. Marketing
research is critical for many obvious reasons. It develops most, if not all, of the
research and data that companies will use for deciding strategic issues.
Marketing research can also help determine how brand equity is actually
measured. Once a definition of brand equity is established, the responsibility of
tracking
12
Brand Image
Images evoked by exposure to a named brand like brand personality, brand
image is not something you have or you don't! A brand is unlikely to have one
brand image, but several, though one or two may predominate. The key in brand
image research is to identify or develop the most powerful images and reinforce
them through subsequent brand communications. The term "brand image"
gained popularity as evidence began to grow that the feelings and images
associated with a brand were powerful purchase influencers, though brand
recognition, recall and brand identity. It is based on the proposition that
consumers buy not only a product (commodity), but also the image associations
of the product, such as power, wealth, sophistication, and most importantly
identification and association with other users of the brand. In a consumer led
world, people tend to define themselves and their Jungian "persona" by their
possessions. According to Sigmund Freud, the ego and superego control to a
large extent the image and personality that people would like others to have of
them.
Good brand images are instantly evoked, are positive, and are almost always
unique among competitive brands.
Brand image can be reinforced by brand communications such as packaging,
advertising, promotion, customer service, word-of-mouth and other aspects of
the brand experience.
Brand images are usually evoked by asking consumers the first words/images
that come to their mind when a certain brand is mentioned (sometimes called
"top of mind"). When responses are highly variable, non-forthcoming, or refer to
non-image attributes such as cost, it is an indicator of a weak brand image.
13
The Law of the Word: Any brand worth its salt should strive to "own" a word
or words in the mind of the consumer. Examples of such brands are Volvo, who
owns the word "safety", Mercedes, who own the word "prestige" and Coca-Cola,
who own the word "cola". Titan, at least when viewed in the context of the
Indian watch market, seems to own the word "quality". Though unsubstantiated
by any formal market research, in an informal survey we conducted among a
sample of 30 people we know (including friends, family, neighbors and
acquaintances), 19 of them, when asked what one word came to mind when
they heard 'Titan Watches' answered "quality". A further 8 answered "Indian",
another word that would do Titan absolutely no harm to own in the minds of
their prospects.
14
The Law of Quality: Though quality is essential to the survival and growth
of any brand, the fact remains that brands are not built by quality alone. The
perception of the brand is as, if not more significant than mere quality. It is here
that Titan "scores". As mentioned previously Titan more or less owns the word
"quality" in the minds of the consumers, thereby implying that it is perceived as
a quality product. Thus, it's actual quality, as well as it's perception of being a
quality product combine to work towards building the strength of the Titan
brand.
The Law of the Name: In the long run, a brand is nothing more than a
name. The difference between products is thus not so much between the
products, as it is between their names, or perceptions of the names. Seeing as
how its name is perhaps the most important element of a brand, we feel that
this point warrants a slightly more in-depth discussion.
Let us see to what extent Titan satisfies these conditions. First of all, the name
'Titan' itself comes from Greek mythology, and symbolizes greatness, grandeur
and power. Remember the Titanic? It is easy to pronounce, as well as to
remember. One only has to compare its name to that of its biggest competitor,
15
HMT to see how well thought out the name Titan is. HMT, while being an
acronym, expands out to 'Hindustan Machine Tools', a generic name if we ever
heard one. Asides from all these differences, the question of perception arises. A
watch is a product, the purchase of which is perhaps driven more by perception
than anything else. What sounds more classy and sophisticated? Titan or
Hindustan Machine Tools?
The Law of the Company: Brands are brands, and companies are
companies. There is a difference. Titan is owned by the Tata Group, who though
highly regarded in Indian industry are associated more with heavy industries
such as steel and truck building, than with watch making. Chances are that no
one would buy a Tata watch (its name invoking the same, if not greater reaction
than an HMT). People would, however buy a Titan.
The Law of Siblings: There is always a time and a place to launch a second
brand, but when this is done it should be ensured that both brands have
separate and distinct identities. Each brand should be kept unique and special.
When Titan decided to diversify into the jewellery segment, they did not call
their new brand 'Titan Jewellery', inspite of the high standing of the Titan name
in the minds of the Indian consumers. To do so would be to undermine the
power of the Titan brand; this is that of being watch experts. Hence, the
jewellery was called Tanishq.
The Law of Shape: A brand's logotype should be well designed, in order to fit
the eyes. Visual symbols (again with the possible exceptions of Nike's "swoosh"
or Mercedes' 3-pointed star) are highly overrated. The meaning lies in the words,
not the symbol. The Titan logo, though well recognizable (please refer to the
cover page in the rare event that you do, in fact actually NOT recognize it) is
always accompanied by the words "TITAN" in a clear, crisp typeface-denoting
power (through the use of capital letters) and class at the same time.
16
The Law of Colour: A brand should use a colour and typeface that is the
opposite of its major competitor. For example, while Coca-Cola stands for red
and appears in running handwriting, Pepsi stands for blue and appears in
capital, modern looking letters. Similarly, while HMT appears in small silver
lettering, Titan appears in capital letters, and is usually in black.
Thus far, we have restricted ourselves to issues exclusively concerned with the
role of the brand in building brand equity. The fact however remains that brand
building is an exercise that requires effort in a number of ways, many of them
unrelated to the actual "brand" as such. These could be related to the product's
image, the company's image, public perception of the parent company, and
efficiency of promotional measures, to name but a few.
17
Expand sensibly:
19
Extensions should always be logical and market driven and not mere "product
explosions". As the market environment changes with the addition of say,
greater competition, or changing customer wants and perceptions, brand
extension should be undertaken. It should not, however be undertaken
arbitrarily. When Titan entered the market in 1987, its main competitor was
HMT, a company offering reliable and economically priced watches. Titan thus
started out being a company offering a wide variety of models, most of which
were priced economically, with the added USP of being a more stylish alternative
to HMT. As times changed, however, so did Titan. With the growing entry of
foreign brands into the market, Titan continued to introduce sub brand after
sub brand to meet every new challenge. With the entry of the "high
performance" sports watch brands in the form of Tag Hauer, Omega and
Breitling, Titan introduced it's own line of chronographs priced significantly
lower than the competition at a mere Rs 5000-6000. Similarly, to counter the
entry of foreign, youth oriented "style" brands such as Esprit and Swatch, Titan
introduced the 'Fast Track' sub brand, again priced extremely competitively.
20
21
high-quality
food,
site
development
expertise,
advanced
The company claims it serves 29 million people a day and that a new store
opens some- where in the world every seven hours. Kroc died in the 1980s but
he has his own shrine in the Corporations headquarters with video-audio
22
hooks-ups so that he can answer trainee managers questions from the grave.
His widow, apparently a billionaire, is still alive and resides in La Jolla,
California.
1954 1968
Ray Kroc became the first franchisee appointed by Mac and Dick McDonald in
San Bernardino, California. Ray Kroc opened his first restaurant in Des Plaines,
Illinois (near Chicago). First days revenues-$366.12 and the McDonalds
Corporation was created. Quality, Service, Cleanliness and Value (Q.S.C. & V.)
became the company motto. The 100th McDonalds opened in Chicago. Ray
Kroc bought all rights to the McDonalds concept from the McDonalds brothers
for $2.7 million. Hamburger University opened in Elk Grove, near Chicago.
One billion hamburgers sold.
The 500th restaurant opened
The 500th student graduates from Hamburger University
Ronald McDonald made his debut
McDonalds net income exceeded $1 million.
Filet-o-Fish sandwich introduced. McDonalds Corporation went public. Per
earning ratio varies from 10 to 22 during year; stock price range, 15 - 33.5.
McDonalds listed on the New York stock exchange on the 7th May. The first
23
restaurants outside of the USA opened in Canada and Puerto Rico. The Big Mac
was introduced. The 1,000th restaurant opened in Deslaines, Illinois.
1970 1980
McDonalds restaurant in every US state. Ray Cesca (Director of Global
Purchasing of the McDonalds Corporation) has admitted that when McDonalds
opened stores in Costa Rica in 1970, they were using beef from cattle raised on
ex-rainforest land, deforested in the 1950s and 1960s. New countries Virgin Islands, Costa Rica. The Egg McMuffin sandwich was test marketed in
the US as McDonalds first break fast menu item. McDonalds Japanese
President, Den Fujita, stated it the reason Japanese people are so short and
have yellow skins is because they have eaten nothing but fish and rice for two
thousand years; so if we eat McDonalds hamburgers and potatoes for a
thousand years we will become taller, our skin become white and our hair
blonde. New countries - Japan, Holland, Australia, Germany, Panama, Guam.
Assets exceeded $500 million and sales surpassed $1 billion. A new McDonalds
restaurant opening every day. New countries - France, El Salvador. The 2,000th
restaurant opened in Des Plaines, Illinois. The Quarter Pounder was introduced.
McDonalds Golden Arches Restaurants Limited founded in UK as a joint
venture
partnership
between
the
McDonalds
Corporation
and
two
businessmen; one British, one American. New country - Sweden. Egg. McMuffin
introduced. The 3,000th McDonalds restaurant was opened in Woolwich (south
east London) in October, the first in the UK. The Companys first Drive-Thru
opened in Sierra Vista, Arizona. New countries Hong Kong, Bahamas,
Nicaragua. Fred Turner becomes Chairman, Ray Kroc Senior Chairman, and Ed
Schmitt becomes President. Broadcast advertising appeared in UK cinemas.
McDonalds first UK TV advertisement was broadcast. 4,000th store opened in
Canada. New countries - Switzerland, New Zealand. Largest restaurant opens with 334 seats. New countries - Ireland, Austria. Breakfast menu introduced,
nationally in America. The 5,000th restaurant opened in Kanagawa, Japan and
24
1981 1990
New countries - Spain, Denmark and Malaysia. Geoffrey Guiliano, a main
Ronald McDonald actor, quit and publicly apologized, stating it brainwashed
youngsters into doing wrong. I want to say sorry to children everywhere for
selling out to concerns that make millions by murdering animals. 7,000 th
restaurant opened in Washington DC. McDonalds was responsible for food
poisoning outbreak caused by Coli bacteria, which affected 47 people in Oregon
and Michigan, USA. Egon Ronay calls McDonalds burgers uninspiring.
Breakfast was introduced to the British menu. The McDonalds Corporation
became sole owners of McDonalds in the UK. The Company is named
McDonalds Hamburgers Limited. Introduction of Chicken McNuggets in USA.
New Hamburger University campus opens in Oak Brook, Illinois. Founder Ray
Kroc dies. 50 billionth hamburger sold. Ronald McDonald Childrens Charities is
founded in his memory to raise funds in support of child welfare. McDonalds
now serves 17 million customers a day - equivalent to serving lunch to the
entire population of Australia and New Zealand. If McDonalds lined up all the
hamburgers sold since 1955, they would: Circle the equator 103.75 times;
Reach to the moon and back 5 times.
Drive-Thru restaurants opened in UK at Fallowfield, Dudley, Neasden and
Coventry. Four workers in Madrid who had called for union elections were
sacked by McDonalds. The company was forced to reinstate the workers after
the labour court ruled that the dismissals were illegal. The 200th UK restaurant
opened in Ipswich. McDonalds became the first UK restaurant group to
introduce nutritional information, throughout the country, for the benefit of
25
1991 2000
The 150th Ronald McDonald House opened in Paris. McDonald's opened in
Beijing, China. The 400th UK restaurant (and first in Northern Ireland) is
opened in Belfast. McDonald's opens in Hampstead (North London) despite
strong opposition from local residents. McDonald's opened in a railway station
at Liverpool Street, London. The 400th UK restaurant (and first in Northern
Ireland) is opened in Belfast. McDonalds opens in Hampstead (North London)
despite strong opposition from local residents. The first McDonalds at sea
opened aboard the Silja Europa, the worlds largest ferry sailing between
Stockholm and Helsinki. 500th UK restaurant opened in Notting Hill Gate,
London. First UK operated restaurant on a ship opened on the Stena Sealink
ferry Fantasial sailing between Dover and Calais. Restaurants opened in
Bahrain, Bulgaria, Egypt, Kuwait, Latvia, Oman, New Caledonia, Trinidad and
United Arab Emirates, bringing the total to over 15,000 in 79 countries on 6
continents. McDonalds celebrated twenty years of operating in the UK. On 15th
April, there were international protests to mark the 40th anniversary of the
opening of the worlds first store of the McDonalds Corporation. February 16th
10am, the McSpotlight website was launched. The Vegetable Deluxe lunch was
launched in the UK. McDonalds opened stores in India. McDonalds and Disney
announced a deal giving McDonalds exclusive rights to use characters from
Disney films in its promotions around the world for 10 years. Commentators
26
called it the biggest global marketing alliance yet devised. McDonalds opened a
store in Belarus, its 100th country. The movie star Robin Williams turned down
a million-pound offer to advertise McDonalds. Chicago, IL, July 25, 2000 McDonalds Corporation, through eMac Digital, a company recently formed with
Accel-KKR, formed electronic Foodservice Network (EFS Network), a company
that will operate an independent B2B marketplace to facilitate sales and
purchases to the foodservice industry and will help maximize Internet-based
efficiencies and savings for its participants across the entire supply chain.
Offering
27
28
Mr. Ray Kroc felt that the operations of McDonalds could be replicated in every
franchise. He began developing exact specifications for the ingredients so that
the taste and cooking times would be consistent. He then went on to develop
precise systems that could be documented to cover every aspect of how the
business should be run from cooking a burger and serving a customer, to
29
washing the floor and emptying the bins. Ray also knew that his systems
needed to extend beyond the internal operations of the business, and into the
external design of the buildings and how they were presented and maintained.
This cloned and consistent style would maximise the value of the McDonalds
brand through the buildings appearance.
1960s (The real growth of McDonalds Brand took off from here)
Ray Kroc bought all rights to the McDonald's concept from the McDonald's
brothers for $2.7million in 1961.Ronald McDonald made his debut (used as an
Advertising tool) in 1963 which saw a new image on McDonalds brand building
in the consumers mind in the form of a human element in the McDonalds
brand, and provided an instant link with children. The rest as they say is
history. There would be barely a man women or child in the developed world
who has not tasted a McDonalds product. Ray Krocs systems were so highly
developed and repeatable that a customer could eat a McDonalds product,
regardless of which country they were in, and still experience the same taste
and service in a restaurant that was identical to any other in the world.
Apart from having a visible brand by using red and yellow color. The colors red
and yellow have been shown to induce hunger. Most of McDonalds restaurants
are decorated in the colors red and yellow.
The growth of this brand has led to McDonalds becoming a global brand
example of that is in 1996; McDonalds overtook Coca-Cola as the best known
30
brand in the world McDonalds has 48 percent of the globally branded quick
service restaurants and 63 percent of sales.
2001
2000
U.S.
12,629
12,472
12,380
Europe
4,943
4,421
3,886
Asia/Pacific
5,655
5,055
4,456
Latin America
1,789
1,405
1,091
Other
1,790
1,465
1,319
Total
26,806
24,818
23,132
Another proof of that is our Indian market, which has provided a good boost to
McDonalds advent into India.
Future Growth:
The opportunities for McDonalds are truly global with a policy of continuous
innovation of product and service spreading the enormous depth and breadth of
the McDonalds brand, which is being well received around the world.
31
Brand Awareness
The American awareness of McDonalds as a brand is very high. Today
McDonalds is a Global name, famous for its delicious burgers and mouth
watering French fries. The customers awareness of the brand goes back to the
earlier days when the McDonalds brothers had decided to start off with the
restaurant. The consistent taste of the Mac meals is one of the reasons for
uniformity in the product. Today the brand is well known for its affordability
and high quality standards. Over the years the company has managed to live
upto its image by providing prompt service unfailingly, constantly improving the
standards of its burgers and providing entertainment to its target customers
mainly children who are always in the lookout for a fun filled hour with Ronald
McDonald the McDonalds mascot. These critical improvements have helped the
brand to be popular among the millions who visit the joint for a quick bite. One
of the major recallers of the brand is the golden arch of the McDonalds logo. The
red sign with the golden
In a market like India, the brand is still in its infant stage. Launched in 1996,
the company has done quite well for an initial beginning. Catering to a customer
base which is used to eating the many delicacies offered by the Indian cuisine
which is spicy unlike the McDonalds burgers, the company has definitely faced
a few rejections from the consumer, but it was not long before the brand took
over the hearts of the younger customers, mostly the average urban teenagers
who found the place very happening and ideal for an evening with friends.
32
Perceived Quality
In a recent survey conducted by a leading agency, it was found that in India,
although most of the McDonalds found the pricing of the product quite high,
but the perceived quality of the products were rated as high as 4 or 5 out of a
scale of 5. This shows that the company has been able to live upto its high
quality standards set through operational excellence.
Brand Loyalty
From a recent survey it has been found that an average American has visited at
least one of the many outlets in a city at least once in the last year. This can be
directly related to the brand loyalty of the customer. An average McDonalds
consumer visits the store at least once a week.
33
Area of Business
Tata Motors' product range covers passenger cars, multi-utility vehicles and
light, medium and heavy commercial vehicles for goods and passenger
transport. Seven out of 10 medium and heavy commercial vehicles in India bear
the trusted Tata mark.
34
The Tata Indica, India's first indigenously designed and manufactured car, was
launched by Tata Motors in 1999 as part of its ongoing effort towards giving
India transport solutions that were designed for Indian conditions. Currently,
the company's passenger cars and multi-utility vehicles have a 16-per cent
market share.
Environmental Responsibility
Tata Motors has led the Indian automobile industry's anti-pollution efforts
through a series of initiatives in effluence and emission control. The company
introduced emission control engines in its vehicles in India before the norm was
made statutory. All its products meet required emission standards in the
relevant geographies. Modern effluent treatment facilities, soil and water
conservation programmes and tree plantation drives on a large scale at its plant
locations contribute to the protection of the environment and the creation of
green belts.
Exports
35
Tata Motors' vehicles are exported to over 70 countries in Europe, Africa, South
America, Middle East, Asia and Australia. The company also has assembly
operations in Malaysia, Bangladesh, Kenya, South Africa and Egypt.
36
1945 1966
Tata Engineering and Locomotive Co. Ltd. was established to manufacture
locomotives and other engineering products. Steam road roller introduced in
collaboration with Marshall Sons (UK). Collaboration with Daimler Benz AG,
West Germany, for manufacture of medium commercial vehicles. The first
vehicle rolled out within 6 months of the contract. Research and Development
Centre set up at Jamshedpur. Exports begin with the first truck being shipped
to Ceylon, now Sri Lanka. Set up of the Engineering Research Centre at Pune to
provide impetus to automobile Research and Development.
1971 1989
Introduction of DI engines. First commercial vehicle manufactured in Pune.
Manufacture of Heavy Commercial Vehicle commences. First hydraulic excavator
produced with Hitachi collaboration. Production of first light commercial vehicle,
Tata 407, indigenously designed, followed by Tata 608. Introduce of the
Tatamobile 206 - 3rd LCV model.
1991 1995
Launch of the 1st indigenous passenger car Tata Sierra. TAC 20 crane
produced. One millionth vehicle rolled out. Launch of the Tata Estate. Joint
venture agreement signed with Cummins Engine Co. Inc. for the manufacture of
high horsepower and emission friendly diesel engines. Launch of Tata Sumo the multi utility vehicle. Launch of LPT 709 - a full forward control, light
commercial vehicle. Joint venture agreement signed with M/s Daimler - Benz /
Mercedes - Benz for manufacture of Mercedes Benz passenger cars in India.
37
Joint venture agreement signed with Tata Holset Ltd., UK for manufacturing
turbochargers to be used on Cummins engines. Mercedes Benz car E220
launched.
1996 2004
Tata Sumo deluxe launched. Tata Sierra Turbo launched. 100,000th Tata Sumo
rolled out. Tata Safari - India's first sports utility vehicle launched. 2 millionth
vehicle rolled out. Indica, India's first fully indigenous passenger car launched.
115,000 bookings for Indica registered against full payment within a week.
Commercial production of Indica commences in full swing. First consignment of
160 Indicas shipped to Malta. Indica with Bharat Stage 2 (Euro II) compliant
diesel engine launched. Utility vehicles with Bharat 2 (Euro II) compliant engine
launched. Indica 2000 (Euro II) with multi point fuel injection petrol engine
launched. Launch of CNG buses. Launch of 1109 vehicle - Intermediate
commercial vehicle. Indica V2 launched - 2nd generation Indica. 100,000th
Indica wheeled out. Launch of CNG Indica. Launch of the Tata Safari EX Indica
V2 becomes India's number one car in its segment. Exits joint venture with
Daimler Chrysler. Unveiling of the Tata Sedan at Auto Expo 2002. Petrol version
of Indica V2 launched. Launch of the EX series in Commercial vehicles. Launch
of the Tata 207 DI. 2,00,000th Indica rolled out. 5,00,000th passenger vehicle
rolled out. Launch of the Tata Sumo'+' Series. Launch of the Tata Indigo. Tata
Engineering signed a product agreement with MG Rover of the UK. Launch of
the Tata Safari Limited Edition. The Tata Indigo Station Wagon unveiled at the
Geneva Motor Show. On 29th July, J. R. D. Tata's birth anniversary, Tata
Engineering becomes Tata Motors Limited. 3 millionth vehicle produced. First
City Rover rolled out. 135 PS Tata Safari EXi Petrol launched. Tata SFC 407 EX
Turbo launched. Tata Motors unveils new product range at Auto Expo '04. New
Tata Indica V2 launched. Tata Motors and Daewoo Commercial Vehicle Co. Ltd.
sign investment agreement. Indigo Advent unveiled at Geneva Motor Show. Tata
Motors completes acquisition of Daewoo Commercial Vehicle Company. Tata LPT
38
909 EX launched. Tata Daewoo Commercial Vehicle Co. Ltd. (TDCV) launches
the heavy duty truck NOVUS, in Korea. Sumo Victa launched. Indigo Marina
launched. Tata Motors lists on the NYSE.
Consumer perception
Tatas set to unleash global branding drive
The $11.2 billion Tata Group is planning to unleash a major global branding
initiative.
Tata Sons, the group has selected some key foreign markets to introduce a
brand building drive to give effect to the groups vision of becoming a major
global brand.
Tata Motors has forayed into the UK markets, TCS has a presence in US and
south-east Asian countries.
The Tata group has fared well on the twin brand values of emotionality and
relevance.
The perception that Tata group companies are not as aggressive as competitors
is gradually changing. It is now also perceived as a more youthful brand, despite
being a 100-year old brand.
Tata Motors is known as a low-cost manufacturer, not necessarily a high-quality
one. The company is looking to provide value for moneyor more car per car.
In fact, Indica has never been rated highly by JD Power, which conducts
consumer-based surveys. In its latest 'initial quality study' in December '03,
Indica was placed fifth, second from the bottom, among the premium compact
cars with 237 problems per 100 vehicles. Wagon R topped the list with 118. A
caveat though: this survey takes into account actual problems as well as
perceptions. Another indicator: for the UK market, the City Rover has been
spruced up quite a bit. Apart from cosmetic changes like a new bumper and
grille, it has different engine diagnostics and comes with airbags and anti-lock
40
brakes. In addition, the City Rovers are petrol-driven, unlike the diesel models
that form an overwhelming share of Tata Motors' India sales.
But even the diesel models of Tata Motors are in for fresh competition. Hyundai
has launched the diesel version of Accent, which it claims is superior as it has
the latest microprocessors-based common rail direct injection (CRDi) technology
that supposedly increases fuel efficiency and reduces pollution. It also plans to
have diesel options for its forthcoming compact model, Getz, as well as Santro.
Maruti, which imports the engines for its diesel Zen and therefore doesn't find it
viable to make more than 500-900 vehicles a month, is also thinking of tying up
with
a
global
manufacturer
for
diesel
technology.
Revitalising Brand Tata
The Tata group has launched a deliberate and comprehensive effort to reenergise its 124-year-old brand equity, and to connect with youth. Catalyst
takes a look at how this is being done.
A FAMILY of four made its way out of the stands at Chennai's Nungambakkam
tennis stadium on Day 3 of the Tata Open tournament. Outside, T2, the cheery
ball-shaped mascot, was sitting with some other youngsters; seeing the two
kids, he sprang to his feet, came up to them, held out his hand and called out,
"Hi there." The kids stepped back warily, but were quickly won over; he shook
their hands, asked for their names, and then gave them a high-five before
waving good-bye.
For the Rs 49,000-crore Tata group, T2 is just one visible face of a deliberate
and comprehensive effort to re-energise the 124-year-old Tata brand. With 80
group companies and its share of controversy and failures in recent years, the
group is still among the most respected and trusted brands in the country. But
it is only recently the group began a concerted effort to protect and enhance its
brand, which it acknowledges as its "most important asset," and which was
valued at over Rs 10,000 crore four years ago.
"The Tata brand represents assurance, reliability, a sense of nationalism (and)
value for money, irrespective of the product - whether it is a wrist watch, tea,
salt, a piece of software or a car," said R. Gopalakrishnan, Executive Director,
Tata Sons Ltd., at a press conference. "When you have an asset that size, you
have to ensure that whatever you do enhances the asset's value, and also make
it more relevant and contemporary on a continuous basis," adds Romit
Chaterjee, Vice-President - Corporate Affairs, Tata Services.
In recent years, the group has designed a common logo, centralised its media
buying and PR operations, devised a system for group companies to pay a fee for
using the Tata name, and has aligned itself with vehicles that contemporarise
41
the brand and connect with the youth. The group has committed Rs 300 crore
over the next five years to target the younger demographic.
"Every brand needs to keep reinventing itself to keep up with the times - and a
long-pedigreed company, especially, may fall into the trap of not constantly
reinforcing the brand," says Madhuri Sapru, General Manager - Brand, Tata
Services. "Over the last few years, the world has really opened up with
globalisation, and there has been a change in people's mindsets. So it is
necessary to re-evaluate where we stand," she says.
Towards this end, the Brand Equity Business Promotion Fund was created
about four years ago; a Tata-name company, like Tata Steel, pays 2.5 per cent of
its revenues to the fund, and a non-Tata name company, like Voltas, pays 0.01
per cent. The money is used to consistently enhance the brand image, Chaterjee
says.
The group also undertook extensive research a few years ago; every six months,
a brand track study, by Pathfinders, tracks brand perception vis--vis five other
major corporate brands, among 5,000 respondents in 13 cities. The study plots
the Tata brand against the others on two metrics, affinity (how close the brand
is to the consumer, and how warmly it is perceived) and relevance (how relevant
the brand is to the consumer's life). On both parameters, the Tata brand has
risen steadily in value since December 2000, when the study was first
commissioned, and continues to be ahead of the other brands, Chaterjee says.
Two of the primary findings of the research were that the Tata brand is not
perceived as youthful, and that it is not into technology in a big way. So there is
a concerted effort to connect with the youth, and to communicate its
involvement with technology, Sapru says. "There's been a lack of communication
rather than a lack of activity," she clarifies.
Talking to the youth is really the need of the hour, says Sapru, who came on
board about two-and-a-half years ago. "A person above 30-40 years of age has
been growing up with the Tata brand, and has many touch-points with a Tata
product or service, so the associations are far stronger," she says. "But today, it
is a very brand-driven universe, and we need to ensure that amidst all the noise
made by other brands, the perception of the Tata brand stays the same with the
younger audience."
Young people are the "consumers, stakeholders and employees of tomorrow,"
and to connect with them, the group uses contemporary media such as the
Internet and SMS, and events and personalities, Chaterjee says. Its stake in the
Barista chain, for example, provides a popular venue to connect with the desired
demographic, and the group has done interactive sessions with ace driver
Narain Karthikeyan, a brand endorser, at sports bars and pubs in some cities.
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Their research indicated that the three most effective vehicles to reach the youth
are movies, music and entertainment, and sports. Movies were ruled out although Marg, a Tata group company makes documentary films - but the
group has associated with select music and entertainment events: it has
sponsored a Shakti concert and one dedicated to Bob Dylan, and considers
them big successes. The group will continue to associate with "contemporary
classics, or contemporary legends" relevant to the Tata brand, Chaterjee says.
The group also signed a three-year title sponsorship deal for India's only ATP
tournament, beginning 2002. Last year, it also signed on India's F-1 aspirant,
Karthikeyan, to endorse some of its brands, including Titan's Fastrack. The
$400,000 Tata Open provides a platform for a host of Tata products and
services, including Titan, the Taj group of hotels, Tata Indicom and Trent's
Westside. "We are trying to exemplify the `Tata One World' concept more and
more, so any marketing activity is an integrated effort," Chaterjee says. "Tata
and MTV is an unusual kind of combination, but this is how we are making
ourselves relevant to the younger generation." The two have a deal to do some
programmes on the Tata Open tournament.
In tennis and motor racing, the group has found very strong personality
matches, Chaterjee adds. Formula Motor racing is about speed, energy,
aggression, and fighting against tough international competition; tennis, too, is
about speed, dynamism, aggression, and slugging it out against international
competition in the tournament, he says.
When IMG, which owns and manages the ATP tournament, approached the Tata
group after ITC pulled out of the sponsorship deal, the Tata management "asked
all the right questions and were very diligent and straightforward," says Ravi
Krishnan, Managing Director, IMG/TWI - South Asia and Senior International
Vice-President, IMG. Given that this is a high-profile sporting event with a
global, youthful image, it helps the company establish its new brand identity
and reach a different audience. "The biggest annual global sporting event in the
country and one of the biggest brands in the country - it's a very good fit,"
Krishnan says. "From the point of view of audiences, its employees, its sales
force, the Government and the bureaucracy - the event brings the brand closer
to them."
Another focus is B-school campuses, where the group is emphasising greater
interactivity with students, and raising its profile as an employer. It sponsors
the annual inter-collegiate event, Confluence, in IIM-A, and the Business
Leadership Award; its senior managers also go on lecture tours and present
case studies of group companies. "This is where we are going to get our future
employees from, so we want to ensure the Tatas are in the consideration set,
along with the consultancy firms and foreign banks," Chaterjee says.
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In ORG-MARG's recent `Campustrack' survey of most preferred employers on Bschool campuses, Hindustan Lever, Infosys and McKinsey headed the list of 48
corporates; Titan, Tata Engineering and Tata Steel were among the companies
at the other end. However, Indian-family owned businesses in general did not
fare <90,0><90>as well as multinationals, and the Campus Recruiter Index for
the Tata group has improved since the last time, particularly for TCS, Tata
Administrative Services and Tata Engineering, according to ORG-MARG.
The Tata group was rated highly on the parameters of "good standing in the
market" and "large-sized company," and found to lag in the aspects of
compensation/salary package, and international postings and overseas travel.
"By all accounts, the image of a youthful, techie corporate seems to belong to
TCS and, to some extent, to Tata Administrative Services. There is still some
way to go before we can say this about the group as a whole," says ORG-MARG.
However, Chaterjee points out, the Tata group has climbed several notches in
just a year, by making the brand "more relevant and more interesting as a
potential employer in terms of what we stand for." Also, in the wake of the
dotcom bust, qualities such as job stability and pedigree of the company have
become more important, Sapru adds.
Internally, too, there has been a concerted effort to create a sense of synergy
and belonging among the group companies. On the group's Intranet, there are
forums for secretaries, HR managers, CFOs and others to share knowledge and
best practices across companies and regions, Sapru says. The flip side of the
coming together of the companies is that a negative fallout, like the Tata
Finance debacle, can impact the image of the other group companies, too,
warns Ramanujam Sridhar, CEO of brand consultancy, brand-comm.
On the communications front, the group has integrated its activities: Media
Edge is the group's AOR for media buying, and Vaishnavi Communications
handles PR for the largest group companies. Brand experts say the Tata group
is on the right track: today, the brand stands for trust and integrity, optimism
and a dogged spirit to move ahead, says R. Sridhar, Partner, IDEAS-RS. "What is
interesting is that some of the old Tata values are still there, but they don't
make them weak or come in the way of progress," he says.
Indeed, while the 15-30 year demographic is in sharp focus, there is no desire to
alienate older audiences, who continue to be valued customers, Sapru says. "We
are not trying to suddenly become the Pepsi of the manufacturing world - we
just also want to talk to the employee, the customer, and the decision-maker of
tomorrow."
Brand-comm's Sridhar points out that the group has perhaps been seen as "an
ageing patriarch, or a fuddy-duddy." But, with its increasing consumer focus, its
realisation of the value of the Tata brand name, and its new product and service
44
initiatives, there is "a sea-change from the `we also make steel' days: this is the
new energy that is driving the group forward." Indeed, the company's Web site
informs: "The Tata name is a unique asset representing leadership with trust.
Leveraging this asset to enhance group synergy and becoming globally
competitive is the route to sustained growth and long-term success."
45
Colgate-Palmolive is the World Leader in Oral Care with operations in over 200
countries. Colgate Palmolive (India) Limited is India's leading provider of
scientifically proven oral care products with multiple benefits at various price
points. The range includes toothpastes, toothpowder and toothbrushes under
the "Colgate" brand, as well as a specialised range of dental therapies under the
banner of Colgate Oral Pharmaceuticals. These have become an essential part of
daily oral hygiene and therapeutic oral care in India. The Company also provides
a range of personal care products under the "Palmolive" brand name. Being
ranked as India's # 1 brand across all categories by the A&M-MODE annual
survey of India's Top Brands, it is always trying to maintain its quality and aims
at maximum customer satisfaction.
Colgate people working around the world share a commitment to three core
corporate values: Caring, Global Teamwork and Continuous Improvement.
Colgate has been rated the #1 brand across all categories in A&M's annual
survey of India's Top Brands conducted by Taylor
Nelson SofreshMODE. Powered by a rise in its brand
'POWER Score' from 53.91 in the last annual survey
to 56.2 in 2001, Colgate has been ranked the
country's #1 brand since the survey was introduced
in 1992.
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Eight out of nine times COLGATE has emerged as India's Top Brand. The survey
shows a very strong rural presence underlining the success of Colgate's
distribution and marketing Program.
The C-P anthem voices the pride and sense of belonging, Palmolivers feel
towards the company. Developed as part of the Employer Branding initiative
(taken up by the Employer Brand team), the anthem was penned as part of the
communication campaign for the Best Place To Work (BPTW) survey. The main
objective of the anthem is to provide the organizational glue which bonds
fellow C-P members and evokes feelings of pride in the company. The anthem
has received a favourable response from the employees and is played on all
significant occasions when the entire team gathers together. It has already been
sung with gusto at the Intercoms and the launch of conclusion of the BPTW
survey.
It is a unique way of communicating the messages of pride and belonging while
encouraging Palmolivers to give their best. The anthem also stirs up and
motivates people by reinforcing the message of teamwork in facing challenges
and achieving goals.
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50
Brand Equity
ATTRIBUTE
A very generic brand. The word Colgate has taken place of the word toothpaste.
Example: In Gujarat, people call Close-Up as Lal Colgate (red toothpaste) and
they call Colgate Dental Cream as White Colgate (white toothpaste)
BENEFITS
You dont have to search for any other toothpaste.
VALUES
The three core values of Caring, Global Teamwork and Continuous Improvement
are put into action at work as well as in communities. The results are better
products and a better quality of life throughout the Colgate world.
CULTURE
The Code of Conduct reinforces and enhances their corporate culture and
addresses issues of law, ethics and fairness in all their daily business
relationships.
PERSONALITY
Ranked 8 times as No. 1 Brand
USER
A 6 year young boy to 60 year old men in the family uses the brand.
LOGO
The face with a Colgate smile is the logo of the brand. The face
is shown as the globe with a Colgate smile over it, this
represents that the whole world should smile using Colgate.
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COLOUR
Colgate has its logo colour combination of red, blue and white colours. They
have not changed the colour combination from the beginning as these 3 colours
have left a mark (impression) in the mind of the people.
52
Brand Loyalty
How did it win consumers?
The success lies in the satisfaction, trust and goodwill of their consumers. They
believe, that they can best serve the needs of consumers through a consistent,
fair and sensitive consumers communication program.
For that reason, Colgate has established Consumer Affairs in 31 locations
around the world - many of them with toll-free 800#s. The mission of Consumer
Affairs representatives who answer these phones is to:
manner that exceeds their expectations so that they experience satisfaction with
their products, in all respects.
help improve existing products and develop new products that will meet
consumer needs.
The Consumer Affairs Department in India is staffed with
professional
representatives
who
are
knowledgeable
about
Environment
The protection of the environment and the health and safety of our
customers, our people and the communities in which we live and
operate is an integral part of Colgate-Palmolive's mission to become
the best truly global consumer products company. We are committed
to conducting ourselves in a socially responsible manner and to
keeping our business operations environmentally sound. It is our
worldwide policy to manufacture and market our products and
operate our facilities so that we comply with or exceed applicable
environmental rules and regulations. The health and safety of our
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These concerns have been translated into the following guiding principles:
Products
Colgate-Palmolive will provide the public with safe and effective products and
will strive to produce products that have the lowest practical impact on the
environment.
Packaging
To reduce the impact of our product packaging on the environment, we will work
to improve the environmental compatibility of all our packaging materials.
Colgate endorses the worldwide hierarchy of solid waste management: source
reduction; recycling (including reuse); incineration; and landfilling.
Facilities
Colgate-Palmolive is committed to the health and safety of our employees and
the communities in which we operate, as well as the protection of the
environment. We will establish and maintain programs for the operation and
design of our facilities that meet or exceed applicable environmental, health and
safety laws and regulations.
Business
Colgate-Palmolive will consider environmental, health and safety issues in all
significant
business
transactions,
including
acquisitions,
divestitures,
discontinuance of operations, and entry into joint ventures. We will also act in a
responsible manner with respect to the environmental protection of the lands
under our management and ownership.
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Code Of Conduct
Colgate people around the world have built a reputation as a
successful company with the highest ethical standards. Through
living our values of Caring, Global Teamwork, and Continuous
Improvement, and adhering to the highest principles of integrity,
honor, and concern for the environment and others, they seek
to:
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